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Machine Sheds Qualify for Bonus Depreciation

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January 19th, 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.

Paul Neiffer

Paul Neiffer is a certified public accountant and business advisor specializing in income taxation, accounting services, and succession planning for farmers and agribusiness processors. Paul is a partner with CliftonLarsonAllen in Yakima, Washington, as well as a regular speaker at national conferences and contributor at agweb.com. Raised on a farm in central Washington, he has been immersed in the ag industry his entire life, including the last 30 years professionally. In fact, Paul drives combine each summer for his cousins and that is what he considers a vacation. Leave a comment for Paul. If you would like to leave a comment for Paul, follow the link above, however, please make sure to include your email address so that he can reply to your comment (your email address will not automatically show up).

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1 Comment

  • October 11, 2011 at 12:32 pm

    Levi

    Can you get me citations for where this info is in the IRS code? I want to put it with my records for our new building. We are building a machine shed for our nursery to store our equipment in. Thanks, Levi

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