Page 97 - Small Business IRS Training Guides

Slide 45 – New Law – Recovery Period

Provision 13203
Modifications of Treatment of Certain Farm
Property
New Law – Recovery Period

Farm machinery and equipment (some exclusions
apply)
• Recovery period reduced from 7 to 5 years, if the
original use of the property begins with the
taxpayer after Dec. 31, 2017
• Does not include used property
• Excludes grain bins, cotton ginning assets,
fences, and other land improvements
Applies to farming machinery and equipment placed in
service after Dec. 31, 2017

Tax Cuts and Jobs Act of 2017 | Course 73083a | SB/SE 45

Slide 46 – Example 2: Farm machinery and equipment

Provision 13203
Modifications of Treatment of Certain Farm
Property
Example 2
Farm machinery and equipment
A farmer purchased used equipment on December 31, 2017.
The equipment was not a grain bin, cotton ginning asset, fence
or other land improvement. The farmer placed the equipment in
service on the farm on January 2, 2018. Should the property be
treated as 5-year or 7-year property?

Although, the equipment was placed in service after December
31, 2017, the used property should be treated as 7-year
property instead of 5-year property, because the property was
used. The farmer was not the original user of the property.

Tax Cuts and Jobs Act of 2017 | Course 73083a | SB/SE 46

TCJA – Depreciation Provisions Student Guide
05/2019 A-23 73083-102