Discussion:Depreciating inherited farm property
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Discussion Forum Index --> Tax Questions --> Depreciating inherited farm property
| 14 April 2007 | |
| My client inherited farm property from his father. Think I got a basis from the inheritance taxes. What method can I use to depreciate the shop buildings, barn, well, etc? Does it have to be SL? GDS or ADS? There's also an office-in-home for his trucking business -- what method is used there? Thanks so much for your help!! | |
| 14 April 2007 | |
| basis is stepped up to fmv...start depreciating everything anew...use whatever methods, conventions, lives are appropriate | |
Landon5784 (talk|edits) said: | 14 April 2007 |
| Home office MACRS SL 27.5 yr
Shop buildings and barn MACRS SL 39 yr Well 10 yr SL | |
| 14 April 2007 | |
| Isn't this property excluded from MACRS since it was used by a related person? | |
| 14 April 2007 | |
| Use ADS s/l if you are electing out of 263A. This is important. If they are growing row crops, not an issue. Fruit, nut trees, big issue. Check out 263A(e) and 1.263A-4(d) (they'll get you in the range of where you should start reading.)
General purpose farm buildings are 20 yr class life, 25 ADR midpoint life Single purpose structure (ie greenhouse) 10 yr / 15 yr Machinery 7 yr / 10 yr Trees 10 yr / 20 yr This is from an Exhibit in a continuing ed class. Somewhere I got that land improvements were 15 yr / 20 yr and that wells were 20 or 25 yr life (possible RIA N-1305, if you subscribe) Good luck. | |
| 15 April 2007 | |
| Not confident enough to recommend - just trying to give you a heads up on potential issues and where to look to come to your conclusions. | |
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