Deduction/depreciation for Farm Drainage Tile installation

[srivenkat]

Hello,

I own a 45 acre parcel of Farm land that I rented out to a farmer on cash rent basis. It was in the process of getting transitioned to an organic farm so there wasn't enough revenue that was generated for last year (2018) for the farmer to pay any rent. So there's no income to show for 2018, although he paid about $10,000 as cash rent each of the previous 2 years.

However I did spend about $40,000 to install drainage tile in the farm. When I add this in Turbotax as an Asset under "Land improvements", it says "This asset qualifies for a one time special depreciation deduction of $40,000." and asks me if I want the deduction. When I say yes, it eventually says the loss I can deduct is zero. Will it carry forward this loss of $40,000 to future years until it's exhausted? Will it carry forward the property taxes loss to future years as well?

Thanks.

[Critter]

Review the entire return and the  worksheets to see how this loss is being carried forward. 

You can peek at only the form 1040 & state summary page  by going here:

Click on Tax Tools >>>Tools >>>Click on View Tax Summary >>>Click on Preview my 1040

To view the entire return using the online editions before you file, you will need to pay for your online account.

To pay the TurboTax online account fees by credit card, without completing the 2017 return at this time, click on Tools … Then click on Print Center.  Then click on Print, save or preview this year's return.  On the next page, to pay by credit card, click Continue.  On the next screen it will ask if you want Audit Defense, if you do not want this option just click on the Continue button.  The next screen will ask for all your credit card information so you can pay for the account.