Horse Arena Depreciation

[peggysioux]

How many years would you depreciate a horse arena??

[Black Bart]

Don't have a clue

just right this minute, but I have to say, you win this year's award for Most Original Post hands down.

Now -- I'll go see what Lasser (or maybe a palm reader) has to say about such stuff.

[Gene V]

How about Asset Class 01.3 Farm Buildings 20 years MACRS, except for Single purpose Agricultural or Horticultural structures which would be 10 years.

[cpadan]

Depends. Is it an indoor arena (building)? If not, then probably would fall under asset class 00.3 Land Improvements, 15 years.

The other possibility, if it is used in an Agricultural activity, you might be able to call it a fence under asset class 01.1 which is seven year property.

Dan

[taxmandan]

I would treat it as a Single purpose Agricultural or Horticultural structure which would be 10 years.

[cpadan]

I would treat it as a Single purpose Agricultural or Horticultural structure which would be 10 years.

Before you do that, I suggest you look up the definition of Single Purpose Ag Structure under section 168(i)(13) of the Code. A riding arena doe not even come close. The phrase "Single Purpose" is misleading.

Dan

[Jade06]

Marcs

Nonresidential real estate 39 years. It's an arena not just land, or a fence, or a special improvement to the land. If nothing else 7 years if it doesn't qualify in a catagory.

Jade!!

[equinecpa]

An indoor riding arena permanent structure would be considered a farm building - 20 Years

If it's an outside sand ring it could be a combination of (15 years- land improvement) and 7 years for fencing.

And definitely not a single purpose agricultural structure - I've seen riding arenas used for many different purposes.

Carolyn

[Zee]

An indoor riding arena permanent structure would be considered a farm building - 20 Years

If it's an outside sand ring it could be a combination of (15 years- land improvement) and 7 years for fencing.

And definitely not a single purpose agricultural structure - I've seen riding arenas used for many different purposes.

Carolyn

Thanks for the reply from a preparer specializing in this area. I thought this was an interesting question, but couldn't find an answer online.

[cpadan]

And definitely not a single purpose agricultural structure - I've seen riding arenas used for many different purposes.

Carolyn

Your joking, right? And you know the number of purposes has nothing to with the meaning of Single Purpose under code section 168(i)(13)?

Single Pupose Agricultural Structures has a very narrow definition and applies to very few farmers. However It is to the advantage of corporate chicken farmers!
Dan

[Zee]

Your joking, right? And you know the number of purposes has nothing to with the meaning of Single Purpose under code section 168(i)(13)?

Single Pupose Agricultural Structures has a very narrow definition and applies to very few farmers. However It is to the advantage of corporate chicken farmers!
Dan

I'll most certainly never have a client with a horse arena, but I found this thread interesting anyway (I'm easily entertained).

I was suprised to learn single-purpose buildings qualify for the Section 179 deduction.

According to IRS Publication 225, a single purpose agricultural (livestock) structure is defined as "any building or enclosure specifically designed, constructed and used for the following reasons; (1) to house, raise, and feed a particular type of livestock and its produce, (2) too house the equipment, including any replacements needed to house, raise, or feed the livestock."

The publication also indicates that "a structure must be used only for the purpose that qualfied it. For example, a hg barn will not be qualifying property if you use it to house poultry, or a greenhouse using part of the structure to sell plants."

It would appear that a a horse arena might not be a "single-purpose agricultural structure" to me even if enclosed. I've seen horse barns with unrelated agriculture equipment stored (tractors, etc.). And, would guess some host "horse shows, or events". It would seem that might disqualify the structure as "single-purpose".

Please explain why you seem "shocked" that Equine CPA disagreed. Obviously, I'm no expert.

[cpadan]

Zee, my point is a riding arena could not be called a single purpose structure under the tax code even if it was enclosed and used for no other purposes. I am sorry if my last post was taken any other way.
Dan

[cpadan]

How many years would you depreciate a horse arena??

Peggysioux, if this involves the same business you mentioned in your other thread, then the arena would not fall under any of the agriculture asset classes. As I see it, that leaves three possibilities:

1. A covered arena would be nonresidential real estate, 39 years.

2. An outdoor structure would fall under Asset class 00.3. Land Improvement, 15 years.

3. If the arena was portable, (made up of individual panels which link together) it would be 7 year 1245 property.

Hope this helps
Dan

[peggysioux]

Horse Arena

The horse arena is for a taxpayer who started up a business of horse riding lesson and had the arena installed. The rodeo roping client is different business.

[cpadan]

The horse arena is for a taxpayer who started up a business of horse riding lesson and had the arena installed. The rodeo roping client is different business.

The riding lessons would also be reported on Schedule C, so the depreciation options would be the same as I mentioned in my previous post this mourning.
Dan