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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.

Machine Sheds Qualify for 100% Bonus Depreciation Too!

Jan 19, 2011

We seem to be getting quite a few questions regarding what farm buildings qualify for the 100% bonus deprecation for 2011 (and the period after September 8, 2010).  Our latest question is as follows:

"Is there any bonus depreciation on machine sheds in the year 2011?"

For any new farm building placed in service during 2011, all of these buildings will qualify for 100% bonus depreciation since they are considered 20 year property or less for federal income tax purposes.  This includes a machine shed, mobile home for employees, hay shed, house owned by a C corporation, etc.

Therefore, any new building on a farm will qualify for 100% bonus depreciation.  However, only single purpose agricultural structures such as a hog confinement facility or greenhouse, etc. will also qualify for the Section 179 deduction which means it can be a used building in that case.

Remember, only new farm buildings placed in service between September 9, 2010 and December 31, 2011 qualify for the 100% bonus depreciation.

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