We cash rent our farm. This year, 2012, we are going to install new drainage...

Asked May 24, 2013, 1:02 PM EDT

We cash rent our farm. This year, 2012, we are going to install new drainage tile that will cost $ 13,000.00. Since we are renting the farm, and not considered a trade or business, can you show how we should depreciate the $ 13,000.00 in 2012 and later years using MACRS. Do you know which place-in-service convention we should use?
I know we can use the 50% bonus in 2012 but I'm not too sure about using MACRS and which convention we should use. The work should be finished by the end of May and we have no other depreciation expenses to deal with.

management farm management

1 Response

Great question. Here is the link to an article written by a colleague of mine that addresses your question. http://ohioagmanager.osu.edu/financial-management/depreciation-of-farm-drainage-tile/
If you still have further questions, please feel free to email me directly at bruynis.1@osu.edu.

Chris