I have a farm with a loss in 2018. Should be choosing to depreciate, rather than expense, items in the $100-2500 range?

guidestar- · ‎June 6, 2019

2018 is my first full year with a farm. It has a loss. I'm assuming for durable items (assets) >$2,500 I'll depreciate them and for durable items <$100 (e.g. tools) I'll expense them. It is for things in between that it seems I need to make a decision. Should I expense or depreciate? Any guidance on how to make that decision would be appreciate. I expect overall I'll have a NOL in 2018

MichaelL1 · ‎June 6, 2019

If you don't need the loss today (2018) then depreciate them so you can make better use of the write offs (depreciation) in future years.

It actually will not be much (items under $2,500) but everything helps and it will also reduce the Self-employment tax income in future years.

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I have a farm with a loss in 2018. Should be choosing to depreciate, rather than expense, items in the $100-2500 range?

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