Question

Purchased 35 acres w/ 17 acres Farm Tillable

Forum|Forum|4 years ago
February 19, 2022
1 reply
0 views

Hello, I purchased 35 acres in 2021, w/ 17 acres being Farm Tillable, and providing rental income for crops of $1750.00. Rental Income was reported on 1099-MISC from farmer.

1) Can the purchase price of the land be used to help on taxes, or at least what has been paid to principal?

2) Can any of loan interest be applied as deduction, roughly $1535 in interest

3) I purchased a tractor to use to maintain the land and move hay bales. In addition, purchased a storage shed to be placed on property for equipment / tool storage for property. Tractor cost $19k, Shed cost $14k, can either be used as deduction?

Not A Product Question

LeonardS

No, the purchase price can not be used as a deduction or to help with your taxes this includes your principal payments.

Yes, the loan interest, apportioned to the rental use, can be deducted as an expense.

Yes, you can depreciate the storage shed and tractor if they are being used for the rental activity. The tractor will be depreciated over a 7 year period and the storage will be depreciated over a 20-year life.

This TurboTax link What is depreciation? has additional information you may find useful.

**Say "Thanks" by clicking the thumb icon in a post**Mark the post that answers your question by clicking on "Mark as Best Answer"