Farming question

[tpnl]

I have a taxpayer who collects cash rent for his farm land. I file schedule E for this.

Taxpayer paid $13,248 to have the field tiled. I cannot find an example of how to handle this. What would you do?

Thanks

[Koss]

Tiled?

Okay, you do mean tiled, and not tilled, right?

Geez, that's a good one. Out of my area of expertise. So take what I'm about to say with a grain of salt, and wait for someone who does lots of farm returns to come up with an answer.

But here's my off the cuff, gut reaction:

It might be some sort of general maintenance. Suppose you own some vacant land, which you rent from time to time to people who use it for recreational purposes, like, say skydiving, or music festivals, or... I dunno.

So you pay someone to clear away some brush, or mow the grass, or something like that.

What if you own a parking lot, and you pay to have the lines repainted, because they were fading?

How long is the tiling going to last?

Is it an improvement that needs to be depreciated?

Or added to the basis??



BMK

[tpnl]

Tiled installed for drainage purposes

Yes, I meant tile installed for drainage purposes. Is this land improvement since he does not actively particiate in the farming activity? I know farmers who tile their fields can take SEC 179 for depreciation when installing tile.

[Burke]

I would call that land improvement. 15-yrs depr?

[krazykev]

I would probably take it as a land improvement - 15 yr too.

[TaxmannEA]

Land improvement . 15 year. Eligible for 100% bonus depreciation.

[Mo Sheets]

Agree with other posters...

I also would do land improvement and 15 years. I have done the same for farmers when they have installed "waterways" (strips of land that are not farmed but are there to prevent erosion).