Page 95 - Small Business IRS Training Guides

Slide 41 – Introduction

Provision 13203
Modifications of Treatment of Certain Farm
Property
Introduction
• For MACRS purposes, a farming business is a trade or business
involving the cultivation of land or the raising or harvesting of any
agricultural or horticultural commodity. IRC §263A(e)(4)
• Examples (non-inclusive list):
• Animals held for breeding (e.g., cattle, horses, chickens)
• Beef cattle ranching
• Dairy farm
• Fish farm
• Growing crops (e.g., fruits, vegetables, grains, nuts, vineyard)
• Nursery
• Sod farm
• Vineyard
Tax Cuts and Jobs Act of 2017 | Course 73083a | SB/SE 41

Slide 42 – Prior Law

Provision 13203
Modifications of Treatment of Certain Farm
Property
Prior Law
150% declining balance required:
• All property used in a farming business, except real property
• Nonfarm 15 and 20-year property
• Election to use method for 3, 5, 7, and 10-year nonfarm
property

Generally, 7 years recovery period for farming and machinery
equipment

• Examples: Machinery and equipment used in the production
of crops or vines, trees, livestock, the operation of farm
dairies, etc.

Tax Cuts and Jobs Act of 2017 | Course 73083a | SB/SE 42

TCJA – Depreciation Provisions Student Guide
05/2019 A-21 73083-102