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February 20, 2021
Question

We had to put drainage tile in our fields how do we take this off

  • February 20, 2021
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1 reply

February 20, 2021

If this is a farming operation, you would enter the cost of agricultural drain tile as a Farm Asset (Business > Business Income and Expenses > Farming Income and Expenses > Farm Assets). Depending on the cost, you could deduct the entire expense in the year of installation (Bonus depreciation). Otherwise, you would have to depreciate the cost over 27.5 years.

 

If this is not a farming operation, it would be considered a property improvement and not deductible. The cost would be added to the basis of your property and taken into account when calculating gain/loss when you sell the property.