Wildlife Question

[dmj4]

I have a client that was told there is a tax deduction for expenses he has for planting certain grasses and digging a pond for wildlife. He does not have any crops or farm animals for sale. He does not hunt or allow hunting on the land.

I have searched and found that there may be a USDA program, but I can find no deduction for tax purposes. Anybody know of anything?

I have not been on in a while, I have a lot of reading to catch-up on.

Thanks,
dmj4

[Golden Rocket]

Section 1252

dmj4 - it has been a VERY long time since we've heard from you, and welcome you back!

Look at Section 1252. Maybe the easiest place to read is in the instructions for form 4797, page 2. Since you have defined the purpose (or, better stated, have defined what the purpose is NOT), I'm not sure it meets the pure definition of a section 1252 cost.

Long and short of the matter - taxpayer is allowed the deduction, but if he sells the property on which the cost was incurred, he must "recapture" the cost if the sale occurs within five years of the expenditure.

[solomon]

Does

either Sec. 175 or Sec. 182 costs precede the use of Sec. 1252?

This probably falls under the Wildlife Habitat Incentives Program. Do a google search for that and you will find some useful information.

[Bees Knees]

Two possible deductions:

Your client was probably told by someone who was trying to describe the new Qualified Conservation Contribution deduction (see TTB page 1-18), leaving out one important little detail that you have to actually donate the property for charitable purposes in order to take a deduction for it.

The other possibility is the Soil and Water Conservation Expense deduction (see TTB page 5-27) available to farmers.

[Jiggers]

Farm Programs

Your client was probably told by someone who was trying to describe the new Qualified Conservation Contribution deduction (see TTB page 1-18), leaving out one important little detail that you have to actually donate the property for charitable purposes in order to take a deduction for it.

The other possibility is the Soil and Water Conservation Expense deduction (see TTB page 5-27) available to farmers.

Soil & water conservation expenses are limited to 25% of the gross farm income. I think there is no income.

Maybe they are thinking about land banks. Payments are received to keep land out of production. That may generate income that could be used for soil & water conservation expenses.

Try your local ag extension service office. Or Google.

[JAinNC]

It could be a WRP (Wetlands Reserve Program) or WHIP (Wildlife Habitat Incentives Program) or one of several more. I have a reference as of Dec 2006 to go to

https://www.nrcs.usda.gov/programs

I hope this helps.

Jeannie

[dmj4]

Make sure I understand

I can tell him there is no income tax deduction for him because he does not farm and has no income.

I can tell him he needs to check with USDA to see if they have any program help for his project or know of an agency that does.

Is this accurate?

Thanks for the welcome back. We now have a vacation rental and it has taken lots of my time during the busy season.

Thanks everybody,
dmj4

[JAinNC]

He should check with his local Soil and Water Conservation Agency which operates under USDA. Most FSA offices do not know what programs for Soil and Water are available.
The WHIP and a few more do not require him to be a farmer or rancher. There may be cost share funds available to be paid to him if a conservation plan is developed.
Good luck.
Jeannie