topic Farm business LLC claiming section 179 expenses in Business & farm

Farm business LLC claiming section 179 expenses

Sunrao — Tue, 10 Mar 2026 07:09:14 GMT

Hello, I have a farm which is an LLC(sole prop). Business Income was very minimal ($1K) in 2019 as I purchased it in 2019. However, my W2 income from my regular job outside my business is higher ($150K). I had business expenses in the farm like drilling well, purchasing tractor etc($60K of which $25K for tractor). As my tractor was 100% used for business purposes, it qualifies for 100% depreciation under section 179.
Question: As the income from the business on Schedule C is only $1K, will the $25K depreciation related to tractor be applied towards my w2 income and reduce my taxable income from $150k to $125k?

Re: Farm business LLC claiming section 179 expenses

Critter-3 — Sat, 05 Nov 2022 13:28:42 GMT

Yes ... if you use the bonus depreciation and not the 179 deduction which is limited to the Sch C income.

But if this is a working farm you really should be using the Sch F.

Re: Farm business LLC claiming section 179 expenses

Sunrao — Sat, 05 Nov 2022 13:46:22 GMT

I already filed an amendment today and I did a schedule C. It did not prompt me for Schedule F. Yes, it is a working farm and LLC. Also, when filed with schedule C, it did not deduct the complete value of the vehicle even though I mentioned 100% was used for business. Tractor expense was $25K and it only reduced my taxes by $14k. I don’t think it used the bonus depreciation. Will that be part of schedule C? Tried calling customer support to talk to a specialist, but looks like they are closed today

Re: Farm business LLC claiming section 179 expenses

Anonymous_ — Sat, 05 Nov 2022 13:56:57 GMT

You would have needed to start the Farm Income and Expenses section.

Re: Farm business LLC claiming section 179 expenses

Critter-3 — Sat, 05 Nov 2022 14:35:16 GMT

The Sch C and the Sch F will eventually get you to the same bottom line but the Sch F has income and expense categories aligned for farms.

The bonus depreciation deduction will be reported on the form 4562 and is NOT a $ for $ deduction against taxes owed.