Tax Guide for Farmers – Depletion

The Tax Code provides a special section applicable to farmers or those conducting a farming business. One part of that section pertains to the use of depletion.

Following is an overview of depletion.

What is Depletion?

Depletion is the use of natural resources through the activities of cutting, drilling, mining, or quarrying. Through the use of depletion, the owner of the natural resource can determine the amount of the resource’s value that has been used and the amount that remains.

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Tax Guide for Farmers – Section 179 Expense Deduction, Part 2

In the year the property is placed into service, farmers can choose to recover some or all the cost of certain property up to a defined limit. This election is known as a section 179 expense deduction. The section 179 expense deduction is taken instead of depreciating the asset over its useful life.

Following is an overview of how much you can deduct for property under section 179 expense. Section 179 Expense Deduction, Part 1 covered what property qualifies for this expense deduction.

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Tax Guide for Farmers – Section 179 Expense Deduction, Part 1

For certain property, farmers can choose to recover some or all the cost of the asset up to a certain limit in the year the property is placed into service. This election is known as a section 179 expense deduction. The section 179 expense deduction is taken instead of depreciating the asset over its useful life.

Following is an overview of the property that does and does not qualify for section 179 expense deduction.

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Tax Guide for Farmers – Basis of Assets, Part 5: Property as a Gift, Transfer from Spouse, or Inheritance

In the Internal Revenue Code concerning farmers, there is a section on the basis of assets. The purpose of this series of articles is to provide an overview of the rules concerning the basis of assets. The focus of this article is how to treat assets received as a gift, as a transfer from a spouse, or as an inheritance. The previous articles focused on Cost Basis, Allocating Basis, Adjusted Basis, and Basis Other than Cost.

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Tax Guide for Farmers – Basis of Assets, Part 4: Basis Other than Cost

In the Internal Revenue Code concerning farmers, there is a section on the basis of assets. The purpose of this series of articles is to provide an overview of the rules concerning the basis of assets. Whereas the previous articles focused on Cost Basis, Allocating Basis, and Adjusted Basis the focus of this article is Basis Other Than Cost.

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Tax Guide for Farmers – Basis of Assets, Part 3: Adjusted Basis

In the Internal Revenue Code concerning farmers, there is a section on the basis of assets. The purpose of this series of articles is to provide an overview of the rules concerning the basis of assets. Whereas the previous articles focused on Cost Basis and Allocating Basis, the focus of this article is Adjusted Basis.

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Tax Guide for Farmers – Basis of Assets, Part 2: Allocating Basis

The Internal Revenue Code provides the laws used in calculating the income and expenses reported when filing federal income tax returns. The Code and supporting court decisions based on the Code are thorough in covering tax situations for individuals and businesses, including how to complete your taxes if you own a farm or run a farming business.

The last article focused on Cost Basis in determining the basis of assets. The focus of this article is Allocating Basis and Capitalization.

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Tax Guide for Farmers – Basis of Assets, Part 1: Cost Basis

The Internal Revenue Code contains the laws used to determine how income and expenses are reported when filing federal income taxes. The Code and supporting court decisions are comprehensive in covering tax situations for individuals and businesses, including how to complete your taxes if you own a farm or run a farming business.

The Code publications on farming include sections on the basis of assets, which is the focus of this article.

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