Farm business LLC claiming section 179 expenses

[Sunrao]

Hello,  I have a farm which is an LLC(sole prop). Business Income was very minimal ($1K) in 2019 as I purchased it in 2019. However, my W2 income from my regular job outside my business is higher ($150K). I had business expenses in the farm like drilling well, purchasing tractor etc($60K of which $25K for tractor). As my tractor was 100% used for business purposes, it qualifies for 100% depreciation under section 179.
Question: As the income from the business on Schedule C is only $1K, will the $25K depreciation related to tractor be applied towards my w2 income and reduce my taxable income from $150k to $125k?

[Critter-3]

Yes ... if you use the bonus depreciation and not the 179 deduction which is limited to the Sch C income. 

But if this is a working farm you really should be using the Sch F.

[Sunrao]

I already filed an amendment today and I did a schedule C. It did not prompt me for Schedule F. Yes, it is a working farm and LLC. Also, when filed with schedule C, it did not deduct the complete value of the vehicle even though I mentioned 100% was used for business. Tractor expense was $25K and it only reduced my taxes by $14k. I don’t think it used the bonus depreciation. Will that be part of schedule C? Tried calling customer support to talk to a specialist, but looks like they are closed today

[Anonymous_ · Accepted solution]

You would have needed to start the Farm Income and Expenses section.

[Critter-3]

The Sch C and the Sch F will eventually get you to the same bottom line but the Sch F has income and expense categories aligned for farms.  

The bonus depreciation deduction will be reported on the form 4562 and is NOT a $ for $ deduction against taxes owed.