Inherited Farmland tile depreciation

[Farmgirl123]

Can you depreciate the existing tile on inherited farmland in a Trust?  What if you Cash rent the land out to a tenant?

Can you use MACRS and report on 1040E?

What IRS code do you use and what form do you report the depreciation on?

Thank you!

[M-MTax · Accepted solution]

Drainage tile?? Land improvements are depreciable and would be reported on Sch E...1041.... if rent is received by the trust in cash.

[Farmgirl123]

So what code is that under?  Trusts and cash rent landlords can't use 179 and I thought it had to be purchased land?  Not inherited?

Thank you.

[M-MTax · Accepted solution]

You have a land improvement with a 15 year class life.....no Sec 179 deduction is allowed.

[M-MTax · Accepted solution]

Doesn't matter whether purchased or inherited for depreciation purposes....it still has a basis.