Are bulbs depreciated or amortized for a flower business?

[nwtaxlady]

Client has a small flower business, basically seasonal. She grows all her own flowers and sells fresh flower bouquets. She spends alot on seeds and bulbs.
Are either of these depreciated or amortized? Or just an expense? TIA

[Maribeth]

I'll take a stab at this. I would expense the cost of the bulbs and seeds, even if the plants are perennial. I believe that they would fall under the farmer's "crop production expenses", where crops with a preproductive life of 2 years or less are expensed. For example, trees are capitalized; wheat seeds are not.

[TAXNJ]

Seeds and Plants

“Farmers may generally deduct the cost of seeds and plants used to produce a crop for sale. This deduction is taken on line 26 of Schedule F. This rule does not apply to plants with a pre-productive period of more than two years (i.e. trees and vines). Costs for these types of plants must generally be capitalized, not deducted as an ordinary business expense. Under the TCJA, farmers with gross incomes of $26,000,000 or less in 2019 are not subject to the UNICAP rules under IRC ?263A and may generally deduct new plantings. See IRS Rev. Proc. 2020-13 for details regarding a farmer wanting to use the new exemption in the same year an election is in place through which a farmer elected out of UNICAP rules.”

source: https://www.calt.iastate.edu/article...enses-overview