← FarmCPA Home

Deduct Your Tiling This Year

By: | Trackback URL | 2 Comments

April 11th, 2011

We got the following question from one of our readers:

“IF A TENANT TILES OUT LEASED FARMLAND CAN THE TENANT DEDUCT THE COST OF THE DRAINAGE TILE AND LABOR DURING THAT TAX YEAR ON SCHEDULE F?”

2011 provides a great opportunity for either an operating farmer or landlord to put in new tile and deduct 100% of the cost under the bonus depreciation rules.  Tiling is usually allowed as a deduction for Section 179 expense, however, sometimes there are income limitations and other restrictions to using Section 179.  The nice thing about bonus depreciation for new tile is that there are no income limitations and 100% of the cost is allowed as a deduction.

However, if a landlord’s farm rental is considered a passive activity and they incur too much cost for the year compared to their passive income, they will only be able to deduct the tiling to the extent of their income.  The excess is allowed to be carried forward to 2012 and most likely deducted then.

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).

More Posts - Website

Follow Me:
Twitter

← FarmCPA Home

2 Comments

Leave a Reply

Your email address will not be published. Required fields are marked *

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>

Subscribe to this blog by:

Previous Posts

Events

View upcoming speaking engagements and other networking events for Paul Neiffer and CliftonLarsonAllen’s agribusiness team.

See All

  • Twitter Feed

    If you have higher yields or go all corn for the 2014 crop year consider ARC-IC. It may more than offset base acre penalty 2 days ago

    Presenting two farm bill seminars today. Dayton and Walla Walla 3 days ago

    Netflix down $110 in after hours trading. Sign of momentum stocks going flat? 1 week ago

    Getting ready to go to LA to defend my son and I APU Alumni golf tournament victory last year. I may have to carry him again 1 week ago

    Everybody worried about bubble in land market. They should worry about stock market bubble 1 week ago

    77 degrees on October 8. Perfect. 2 weeks ago

    Somehow IRS listed several counties in Iowa as drought stricken. Hard to believe after all the rain this year 3 weeks ago

    Just saw a bighorn sheep eating grass in the bank next to the freeway. Less than 30' from my car. 1 month ago

    After 82 days in a rental car my wife has talked me into a cruise. We leave Thursday for Miami. Can't wait 1 month ago

    Will final ear weights set a new record. If so final corn yield will be going higher (unless we get an early hard freeze) 1 month ago