1040 F deprecation

[Dill]

Could someone please explain the 179 sepcial deprecation to me?
Also were on acct in a box (ie Turbo Tax) do you put slaughter expense? Is it a "custom hire", I'm pretty sure its not veterinary?

[wally]

179 isn't limited to 1040 F.

as i understand it, it's used to fully (or partially) depreciate certain real property used in a business in a single tax year, rather than over the normal several years for depreciation. there are income limits to it, and you can't depreciate more than you brought in for business income (or farm income, although i'm only familiar with using it for business expenses).

i use 179 elections for most of my qualifying business purchases, which means i only have to deal with them for that single tax year, rather than 3 to 5 to 7 or more years.

[Thompson's Tree Farm]

I'd call slaughter costs custom hire. Remember, it can't be expensed if it is for your own consumption.
The 179 allows you to completely depreciate purchases in the first year you buy them but you must make a profit to do this. In other words you can use the 179 only up to the amount of profit on your farming enterprise. Clear as mud yet?:)

[gmcooper]

Thompson said it the way I understand it. If you have no profit you have no eligible 179. You can then just go with depreciation schedule even with a loss. Just shows up with a bigger loss.

[Dill]

Thanks guys I really appreciate that. I have no hope of a profit on the farm side this year. Between building the sugar house last Jan and having the terrible year, and losing a tractor motor in July while haying its going to be big loss.
I'm doing the slaughter under custom hire it was the only spot that seems to fit.
One more question how do I factor in the meat that I keep for personal consumption? Do I have to charge myself my retail rate? Ie when I do a cow I keep a 1/4 for myself and sell the rest.

[gmcooper]

Dill,
May not be to IRS specs but you sold 3/4 so that was income. 0 income on the other 1/4. Or uh maybe there wasn't a 4th quarter on that animal.

[Thompson's Tree Farm]

Dill,
Since you sold 3/4 of the cow, the $ received for that is income. Since you kept 1/4 yourself, you can only deduct 3/4 of the custom slaughter cost as a farm expense. I have several things that I use a % of for business expense. Telephone, computer, internet (Mapletrader is a business expense, watching the news is not).