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toddrub46
Level 3

Trying to determine the best asset class for heavy equipment used in the trimming and cutting down of trees. Seems like it could fit into 5 year construction equipment

Equipment is stump grinder. Seems like asset class 15.0 - Construction  is best, but I could see a case for asset class 01.1 - Agriculture
2 Replies
Anonymous
Not applicable

Trying to determine the best asset class for heavy equipment used in the trimming and cutting down of trees. Seems like it could fit into 5 year construction equipment

 

 

 

you don't meet the definitions under either category if you read the fine print.  if would say you fall under d. below

 

 

from irs pub 946

7-year property.
a. Office furniture and fixtures (such as desks, files,
and safes).
b. Used agricultural machinery and equipment
placed in service after 2017, grain bins, cotton ginning
assets, or fences used in a farming business
(but no other land improvements).
c. Railroad track.
d. Any property that does not have a class life and
has not been designated by law as being in any
other class.
e. Any natural gas gathering line placed in service after
April 11, 2005. See Natural gas gathering line
and electric transmission property, later.

 

 

 

but don't worry.   there's an out.  bonus depreciation will allow you to expense the full cost of the equipment in the year acquired.   you could also use section 179 depreciation, but you may be limited by your net business income.  

 

however, if you have expectations that your business income will be much higher in future years you may wish to limit the depreciation taken this year so the depreciation deduction in future years will have a bigger tax savings.

toddrub46
Level 3

Trying to determine the best asset class for heavy equipment used in the trimming and cutting down of trees. Seems like it could fit into 5 year construction equipment

Thanks so much. I was considering that approach earlier but then thought maybe I could cram into a category. 

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