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Agricultural fencing, taking the Section 179 deduction

We installed an 8' high woven wire fence around our cropland in 2020.  Publication 225 (Farmers Tax Guide, Chapter 7, page 39) indicates that "agricultural fences do qualify as section 179 property".  We would like to take the Section 179 deduction, but TurboTax does not seem to make provision for this type of asset. 

 

When I set up the asset under Business Income and Expenses>Farm Income and Expenses>Farm Assets, TT asks me to "select the option that best describes this asset", offering the following options:

 

1)  Farm equipment, Animals, Agriculture

2)  Tools, Machinery, Equipment, Furniture

3)  Real Estate Property

4)  Computer, Video, Photo and Telephone Equipment

5)  Intangibles, Other property

 

I tried a couple of options (3 and 5), but it doesn't seem to allow the Section 179.  I suppose I could work around the issue by selecting 1 instead "equipment used in farming", but this also doesn't seem to be a good match.

 

Any suggestions?  

3 Replies

Agricultural fencing, taking the Section 179 deduction

As sometimes is the case, the teacher will come when the student asks the question - I may have found the solution - The last option 5, Intangibles and Other Property - if you stick with "Other property" TT give the option to assign the asset class and life of asset.  Publication 946, page 29, indicates that "fences used in a farming business" are 7-year property (GDS).  I think I'm going to go with that.

ColeenD3
Expert Alumni

Agricultural fencing, taking the Section 179 deduction

Pub 946 also says on page 17:

 

Land and Improvements Land and land improvements do not qualify as section 179 property. Land improvements include swimming pools, paved parking areas, wharves, docks, bridges, and fences.

 

New rules under TCJA (see this LINK) did make some changes to allow some assets that were previously not allowed to take a Section 179 to now take the deduction. The following are now permitted:

 

Qualified section 179 real property.

 

You can elect to treat certain qualified real property you placed in service during the tax year as section 179 property. If this election is made, the term “section 179 property” will include any qualified real property that is:

 

• Qualified improvement property as described in section 168(e)(6) of the Internal Revenue Code, and

• Any of the following improvements to nonresidential real property placed in service after the date the nonresidential real property was first placed in service.

 

1. Roofs. 2. Heating, ventilation, and air-conditioning property. 3. Fire protection and alarm systems. 4. Security systems

 

 

Agricultural fencing, taking the Section 179 deduction

The IRS website clarifies under "What Property Does Not Qualify?" that AGRICULTURAL fencing DOES qualify:

 

Land and improvements.

 

Land and land improvements do not qualify as section 179 property. Land improvements include swimming pools, paved parking areas, wharves, docks, bridges, and nonagricultural fences. However, agricultural fences do qualify as section 179 property. Similarly, field drainage tile also qualifies as section 179 property."

 

So, you are incorrect. Farm fences ARE tax deductible and DO qualify as section 179 property. Please amend your answer, since many people will see you as the "expert."

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