Farm

[tracyb]

Can a cabin build on a farm (not used as personal residence) be depreciated and included on Sch F or would it be more appropriate to consider it a second home. It is used primarily on weekends while working on the farm.

[Black Bart]

Who's using it?

A tenant/farm hand or the farm owner?

[tracyb]

Farm

Farm owner

[Jiggers]

Farm Residence

Probably just a second home.

[Black Bart]

Sorry, guess

you'll have to flip a coin. I can't find anything about the farmhouse residence.

There's info about being able to depreciate a tenant's mobile home (if it's still on wheels) in seven years, but nothing about a regular house used by the owner (they do say a farmhouse can't be depreciated}. Actually, I can't see what difference it makes if it's being used to board a tenant or anybody else on a part-time basis. But the farm depreciation books don't discuss it one way or the other. It's not a single-purpose agricultural buildng, so doesn't qualify there. Wonder if you could look at it like a 20 year farm building?

[tracyb]

Farm house/cabin

Thanks for taking the time to look it up. I couldn't find anything specific on it either. At this point, I think I'm going to consider it a second home and keep researching.

[cpadan]

Depends

The first hoop you need to get through is to determine if this is a really a business or a hobby. If a business, then the reason staying over must because it's not practical to return to thier tax home at night.

Here's an example. Ranchers have a cow camp in the mountains where they stay for several days or sometimes for a week or more . The cost of the cabins are decuctible because they are clearly up there for a business reason and it is not practical to travel home every night. Maybe the followeing post from RIA CHECKPOINT will help.

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Costs of traveling to and from the minor place of employment and meals and lodging at the minor post are deductible as away-from-home expense where the travel requires an overnight stay. 22 If there's no overnight stay, transportation between the two places of business is deductible, 23 but the meals aren't
**********
Good Luck
Dan

[Possi]

soybean farm travel

Well, I just put the skids on my overzealous client who owns lots of land that he takes friends hunting on. Maybe I'm wrong for not allowing his travel back and forth, so I'll vent it here and see what y'all say.
This is my first yr doing his return, and I have last yr return which also has no travel to and from farm, (done by a big tax firm.)
He has agriculture payments to him of 1800 and no other income for the soybeans he grows. We expense seed and some expendable equipment, repairs and only 120 in labor.
This is the same man who sold the timber I was having a problem with. Same farm.
The timber is on the sch D with reforestation expenses on Sch A under investment expense.
He has a trailer house, on the farm, a doublewide that he has spent over 20k renovating after a fire, which he will rent out when it is ready.

After reading this thread, maybe he CAN take the travel expense, meals and all, and use the $$ spent on the trailerhouse as farmhouse-trailer (still on wheels) and depreciate it over 7 years.

Anyone?
ps, I really didn't want to do this return, but he and his wife insisted. I should have refused, but now it's toooooo late.

[Bill Tubbs]

Reforestation

This is the same man who sold the timber I was having a problem with. Same farm.
The timber is on the sch D with reforestation expenses on Sch A under investment expense.

Possi,

For the reforestation expenses, have you looked at Form 1040, Line 36, "RFST" ? Putting it here could drop his AGI, which may have other effects on his return, including lowering the 2% floor so potentially more Misc Deductions become deductible. Also, Line 36 is not an AMT adjustment (as far as I know) but the Misc Deductions are.

Bill

[cpadan]

Sounds like a hobby

Sounds to me like the trips to the farm are for weekend recreation v.s. business. In that case it's a second home.
Dan

[Possi]

Bill, Dan thanks

Bill, I will put it on page 1. I should have known that one.
Dan, even if it is recreation, if he rents out the doublewide, I'll put all the expenses to renovate into the basis.
Would his travel back and forth to renovate then be added to the basis as well?
God Bless Y'all!

[tracyb]

farm vs recreation

After discussing with the client further, we definately have a second home.