I inherited farm land that I cash rent and the renter sends me a 1099 misc each year. The income an expenses for this property are reported on a Federal Schedule E. This year I paid for field drainage tile on this land which needs to be depreciated on the return. However, I am getting a message on the Turbo tax software that this qualifies for a special depreciation allowance i.e. the whole expense . I am a bit confused as this has always been considered passive farming rental income. I do choose the renter, handle the rental contracts, and make decisions regarding maintenance and improvements but do not manage the planting decisions.
I made the decision and paid for this tiling. However, I was not aware the special depreciation rules for tax section 179 applied to me, so, I am a bit confused.
