The IRS booklet specifically for agriculture is helpful. I get one every year. It might be 100 pages more or less. It is free.
Here is my take for ground you actually farm:
First, the government cost share payment is all taxable and reportable on your schedule F. This income will be reflected on your 1099 you get from the Farm Service Agency (former ASCS). This is reportable the year you actually get the electronic deposit. Some years I have already paid the contractor for fall work and do not get reinbursed until the next year.
Second, conservation expenses can be deducted. There are limits. I think it is 25% of gross farm income. If you spend $10,000 on terraces you better have $40,000 of gross income. If there was extensive tiling done then that portion could be put on your depreciation schedule. You can carry over to the following year the remainder of the cost if over the 25% of gross limit. Certainly better but probably not 100% necessary if this conservation work is part of your Farm Service Agency conservation plan.
Sometimes when you play income taxes on the cost share and have to build the structures to the Farm Service Agency's requirments (larger) the $ benefit might be questioned by some.
I am surprised that even a non farming landowner with income from rent couldn't deduct 100% of conservation expenses. If you received cost share how would you offset this income without a 100% deduction (to the limits)?? I should go back and read my agricultural tax booklet.
I am interested in how others deal with this issue.
We sell tractor parts! We have the parts you need to repair your tractor - the right parts. Our low prices and years of research make us your best choice when you need parts. Shop Online Today. [ About Us ]
Today's Featured Article - Restoration Story: Fordson Major - by Anthony West. George bought his Fordson Major from a an implement sale about 18 years ago for £200.00 (UK). There is no known history regarding its origins or what service it had done, but the following work was undertaken alone to bring it up to show standard. From the engine number, it was found that this Major was produced late 1946. It was almost complete but had various parts that would definitely need replacing.
... [Read Article]
Latest Ad:
1964 I-H 140 tractor with cultivators and sidedresser. Starts and runs good. Asking 2650. CALL RON AT 502-319-1952
[More Ads]
All Rights Reserved. Reproduction of any part of this website, including design and content, without written permission is strictly prohibited. Trade Marks and Trade Names contained and used in this Website are those of others, and are used in this Website in a descriptive sense to refer to the products of others. Use of this Web site constitutes acceptance of our User Agreement and Privacy Policy
TRADEMARK DISCLAIMER: Tradenames and Trademarks referred to within Yesterday's Tractor Co. products and within the Yesterday's Tractor Co. websites are the property of their respective trademark holders. None of these trademark holders are affiliated with Yesterday's Tractor Co., our products, or our website nor are we sponsored by them. John Deere and its logos are the registered trademarks of the John Deere Corporation. Agco, Agco Allis, White, Massey Ferguson and their logos are the registered trademarks of AGCO Corporation. Case, Case-IH, Farmall, International Harvester, New Holland and their logos are registered trademarks of CNH Global N.V.
