1040 E Farmland/depreciation

[Farmgirl123]

A trust rents farmland that is tiled and depreciation.  If 5 is land and is non depreciable what type of property or how do you indicated farmland with tile being rented?  What about amortization as well on that farmland?

[AmeliesUncle]

If the land has improvements, you enter that improvement as an "asset" for depreciation.

The land itself is not depreciated or amortized.  There is no deduction for the farmland itself.

[Farmgirl123]

Thank you!

so you segregate the improvement from the farmland?

So I enter the farmland on 1b as 5.  
Where do you enter asset on the 1040e to depreciate?  As other on 1b or 8?

[AmeliesUncle]

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@Farmgirl123 wrote:

so you segregate the improvement from the farmland?

So I enter the farmland on 1b as 5.  

Where do you enter asset on the 1040e to depreciate?  As other on 1b or 8?

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Sort of.  It is still one rental of land (yes, #5 on line 1b).  The tiling is a sub-section of the land rental.

As you continue to go into the questions for that land rental, there will be a section asking for assets or depreciation.  You will enter the information there about the tiling.

[Farmgirl123]

Thank you.

But where would the depreciation and amortization numbers show up on the actual paper return?  If you put farmland as 5 and it's not depreciable, it couldn't go there on the 1041 E. correct?

Would it show up on form 4562 for the year?

Thank you.

[DawnC]

There is no depreciation on the land, but there is an amortization schedule for any depreciable assets you have entered, such as the tiling.   There will also be worksheets created for all assets you enter, including any land.   The basis of the land won't be included on Schedule E, only income and expenses will show up there.   

When you enter depreciable assets—vehicles, buildings, farm equipment, intellectual property, etc.— TurboTax generates Form 4562 and applies the correct depreciation method.    There is no single place in TurboTax to enter depreciable assets.   Instead, when you enter your business, rental, farm, or job-related expenses, we'll ask about related assets and apply the depreciation at that point.

Use Form 4562 to:

• Claim your deduction for depreciation and amortization.
• Make the election under section 179 to expense certain property.
• Provide information on the business/investment use of automobiles and other listed property.

For more information on land expenses, see Publication 225 - Conservation Expenses for Land

[Farmgirl123]

Thank you!,   So I think I’m understanding the depreciation will be on the 4562.  

Also, can you transfer a depreciation and cost basis from one TIN to another?   For example from an estate to a trust with 2 different Tax numbers?   Does the placed in service date stay the same?

[RobertB4444]

You can transfer the property from one entity to another through a sale or ownership transfer.  The basis for the property does transfer along with the asset if it is just a transfer.  

In the event of a sale then the asset starts as a brand new asset for the purchaser and they depreciate it with an asset start date of the date of purchase and an asset value of what they paid for it in the sale.

@Farmgirl123 

[Farmgirl123]

Thank you!!

[Farmgirl123]

Thank you.  This would be tiling, fencing, buildings, house and amortization of excess fertilizer.  I would assume that would be claimed on the 4562 then?   Land rental on the 1040e?   

[LeticiaF1]

Yes, that is correct, the tiling, fencing, buildings, house and the amortization of excess fertilizer will go in as depreciable assets on Form 4562.  For the rental of the land, the income and expenses will go on Schedule E.  

If you would like more information see the following TurboTax articles related to your question:

What is Schedule F: Profit or Loss from Farming

Where do I enter Form 4562?

@Farmgirl123 

[Farmgirl123]

Thank you!!

[Farmgirl123]

We won’t be using F as this is a rental in a trust.  Still use 4562?

Thank you!

[MaryK4]

Yes, you will still need to provide a Form 4562 for any property that you depreciate in a trust with the 1041 so that information will be available on the Schedule K-1 (1041) Line 9.