What is the asset class for Grain bins that are rented out for income. Can I use the section 179 deduction How many years do I have to depreciate this property?

jpbsnyders · ‎June 1, 2019

I purchased an acreage that included 4 grain bins that cost $34,733.00. I rent the bins out and have received income for 2016. Using your software. I selected the Section 179 depreciation expense and it actually reduced my refund. When I selected the three year %200 Declining Deprecation it greatly increased my refund. I don't understand I thought with Section 179 I should have been able to write off the entire expense in the year purchased 2016

Rick19744 · ‎June 1, 2019

A couple of follow-up questions:

1) Where are you reporting the grain income; Schedule F?
2) What is the income generated from this activity?

*A reminder that posts in a forum such as this do not constitute tax advice.
Also keep in mind the date of replies, as tax law changes.

jpbsnyders · ‎June 1, 2019

This is not considered a farm so I am not reporting the gain on Schedule F. The income generates about $5,000.00

Rick19744 · ‎June 1, 2019

To address you questions:

The grain bin is a 7 year life asset
Section 179 has a taxable income limitation. You are only able to take Section 179 to the extent of your aggregate taxable income derived from the active conduct of all trades or businesses.
Bullet number 2 is probably limiting your Section 179 deduction.
Make sure you verify the amount that is listed on your 4562 line 11. This is your business income limitation figure.

*A reminder that posts in a forum such as this do not constitute tax advice.
Also keep in mind the date of replies, as tax law changes.

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What is the asset class for Grain bins that are rented out for income. Can I use the section 179 deduction How many years do I have to depreciate this property?

Investors & landlords

Investors & landlords

Investors & landlords