JimTaxes Posted February 4, 2017 Report Share Posted February 4, 2017 I did research this but cannot find answer.. SMLLC, bought some trees, planted them.. some equipment. supplies, fence, etc about $ 4,000 in 2016 trees will not be ready for 2 or 3 years.. Can these expenses be deducted in 2016 or do they get capitalized somehow..thank you Quote Link to comment Share on other sites More sharing options...
Ringers Posted February 4, 2017 Report Share Posted February 4, 2017 Here is what I have used in the past ot determine whether to expense or capitalize the pre-productive expenses. https://www.irs.gov/businesses/small-businesses-self-employed/farmers-atg-chapter-four-expenses-1 Quote Link to comment Share on other sites More sharing options...
Lee B Posted February 4, 2017 Report Share Posted February 4, 2017 IRS Pub 225 Farmers Tax Guide is a good resource 2 Quote Link to comment Share on other sites More sharing options...
DANRVAN Posted February 4, 2017 Report Share Posted February 4, 2017 He might benefit from electing out of capitalizing preproduction cost through Reg. 1.263A-4. He would then use alternative depreciation per 168(g)(2). 1 Quote Link to comment Share on other sites More sharing options...
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