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Discussion Forum Index --> Advanced Tax Questions --> FARM TAX QUESTION

Discussion Forum Index --> Tax Questions --> FARM TAX QUESTION

RICKSTER (talk|edits) said:

3 September 2009
I have a client who purchased raw land into a LLC. In 2008 the Dept of Agriculture gave him a grant(taxable per the 1099G $81,660 for a National Reclamation project. Basically with the owner's permission the Dept of Agriculture hired contractors to plant shrubbery and trees along the riverbank of the LLC's property. The question arises how should the expense of the plantings be shown on the return. Can the entire cost be expensed under Sec 179 or some farm related tax expense section or does expenditures have to be depreciated over a term of years. If that is the case he will show income this year and then possibly not be allowed to deduct the remaining years writeoffs due to the passive nature of the activity. One other fact that may mitigate the situation is that over 50% of the plantings died in the fall/winter which could lead to an abandonment type of loss. Any help would be appreciated since I am not a farm tax expert>

Bertkdo (talk|edits) said:

4 September 2009
I had a client with something similar 2 years ago. Take a look at the instructions for Schedule F, Line 14, Deductible Soil and Water Conservation Expenses. Would this possibly apply in your case?

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