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jpbsnyders
New Member

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?

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

1 Best answer

Accepted Solutions
Rick19744
Level 11

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?

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.*

View solution in original post

3 Replies
Rick19744
Level 11

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?

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.*
jpbsnyders
New Member

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?

This is not considered a farm so I am not reporting the gain on Schedule F.  The income generates about $5,000.00
Rick19744
Level 11

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?

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.*

View solution in original post

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