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Taxlink by Andy Biebl
Andy Biebl DTN Tax Columnist
Mon Mar 10, 2014 10:14 AM CDT

It took the IRS four drafts, but we have finally arrived at final regulations on when an expenditure is a current expense versus a capitalized improvement. This has long been a vexing question. Fortunately, farmers tend to have less risk on this issue than their non-ag counterparts. Farm structures range in depreciable life from 10 to 20 years, whereas real estate in the non-ag sector is 39 years. Here are some of the key definitions from the new regulations.

Materials and supplies

These are deductible at purchase, even though there is significant value. Examples are fuels and lubricants, and other ...

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