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]

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]

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?

[jpbsnyders]

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

[Rick19744 · Accepted solution]

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.