Farm asset depreciation and the recovery period for each asset class

You depreciate farm assets under the same MACRS system as any other business, on a table of recovery periods built for farming. The IRS sets those out in Publication 225, the Farmer’s Tax Guide, which is the reference to keep open while you build a schedule.

Farm asset depreciation classes and how to assign them

Farm recovery periods by asset class

5 years New machinery and equipment where you are the first user. Also purchased breeding cattle.

7 years The same machinery bought used, plus grain bins and agricultural fences.

10 years Single purpose agricultural structures such as a hog barn or a poultry house.

15 years Land improvements: drainage tile, irrigation pipeline, wells.

20 years General purpose farm buildings, a machine shed or a hay barn.

Watch New against used is a two year swing on the same tractor. Check who used it first.

You can claim Section 179 on the 10 year hog barn and not on the 20 year machine shed. You can claim bonus depreciation on both.

You depreciate new machinery and equipment used in farming over five years where the original use begins with you. Buy the same machine second hand and you depreciate it over seven. On a large purchase that is a real difference in the early years, and you look at the machine’s history to work out which, not at anything about your operation.

A hog barn or poultry house built for one kind of animal and not usable for another is ten year property. Add a general workshop area or a second use and you depreciate the whole building over twenty years instead.

Which depreciation method to use for each class

Three, five, seven and ten year farm property can use the 200% declining balance method, and you may elect 150% or straight line instead.

On fifteen and twenty year property you have to use the 150% declining balance method under the general system, with straight line available by election. Preparers carry forward last year’s setting, so you find this error on tile and building schedules.

Where Section 179 and bonus depreciation fit

You can claim both, on top of the class you assigned. Section 179 has an annual cap and you stop at your taxable income. Bonus depreciation has neither limit, and the rate is 100% for property you acquired after January 19, 2025. The interaction between them is covered in full on what assets qualify for bonus depreciation.

You can claim Section 179 on tangible personal property and on single purpose agricultural structures, and not on general purpose farm buildings. So you can claim it on the ten year hog barn and not on the twenty year machine shed. Two buildings on the same yard, two different answers.

What you can claim under bonus depreciation but not under Section 179

You can claim bonus depreciation on any asset you depreciate over 20 years or less, from five year machinery to the twenty year building. So you can claim it on the twenty year machine shed and on fifteen year tile, and you can claim Section 179 on neither.

You pick individual assets under Section 179, and you cannot go below zero income with it. You claim bonus depreciation by class, and you can go below zero with that.

What to check on your own schedule

• Purchased breeding livestock:You depreciate it, and preparers expense it or leave it off the schedule.
• Tile put in years ago:Someone expensed it at the time when it should have gone on the schedule over fifteen years.
• Land and improvement split at purchase:Put too much to bare land and you understate depreciation from then on.
• Assets still on the schedule that no longer exist:You sold, traded or scrapped the equipment without recording the disposal.
• Raised breeding livestock:You already deducted the cost of raising it, so there is nothing left to depreciate.

Where any of these have run for two or more years, you fix them with a method change and not with an amended return. That route is covered on Form 3115 depreciation catch up.

What farm depreciation work costs

Priced on the asset register and its condition. What we quote against:

• Number of assets and whether a usable schedule already exists
• Whether prior years need recomputing
• Whether the operation is an entity with owner level basis to track
• Whether income averaging or a uniform capitalization election is in play

These are the factors, not a quote.

How we rebuild a farm depreciation schedule

Licensed CPAs and Enrolled Agents, working from the asset register rather than from last year’s software file.

This page is general information rather than advice for your circumstances. Outcomes turn on facts specific to you, so speak to a CPA before acting on anything here.