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The Farm CPA

RSS By: Paul Neiffer, Top Producer

Paul is now part of the fourth generation in America that is involved in farming and hopes the next generation will be involved also. Through his blog he provides analysis and insight to farmer tax questions.

Buildings Must Be On The Depreciation Schedule!

Oct 31, 2011

We had a reader ask the following question:

"My husband is a full time farmer and we are currently building a tool shed that will be done by the end of 2011. Will we be able to deduct the whole cost of the building or will it need to go on a depreciation schedule. Thanks for your time."


A new qualified farm building placed in service before January 1, 2012 is allowed to be deducted in full using 100% bonus depreciation.  However, the asset must still be entered on a depreciation schedule and the resulting depreciation deduction flows through to form 4562.

The bottom line is that this deduction is still part of overall depreciation expense.

Just a reminder, a farmer only has two months left to either purchase any new equipment or construct a new farm building to take advantage of 100% bonus depreciation.  For both types of assets, the asset must be placed in service before January 1, 2012.  Simply purchasing the equipment and not taking delivery of the equipment will not work.

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