Joe small time cash basis farmer has equipment, supplies, REPAIRS. He expenses out supplies when bought. Dep. 99% of equip. On repairs we look at each item. Is the 3115 required for him. All old dep set up under farm rules. What do you think?
-
-
Roger McEowen with the Center of Agricultural Law and Taxation recently published an article on this particular issue. It is on the website for CALT (Tax Place) and requires a membership. It has been worth every penny for the membership if you prepare a lot of farmer returns.
Just search his name - many people are discussing the article.
The crux of his article is that farm taxpayers treatment of materials and supplies has been determined by Treas Reg. 1.162-12(a) and that such regulation still applies to farmers (full deductibility of all items expended in farming (save equipment). He concludes that due to this Reg., the distinction between incidental and non-incidental materials and supplies will not apply to farmers.
I am only planning to make the elections for farmers with no Form 3115 unless I find that I made a depreciation error or something of that nature.
I do encourage you to try and read the article (it does require a membership). I do not want to delve too far in to the article or risk copyright violation. -
I subscribed. Finally found the article. Can't find any discussion on it.Jiggers, EAComment
Comment