Depreciation and Other Information

You can deduct depreciation of buildings, improvements, cars and trucks, machinery, and other farm equipment of a permanent nature.

Don't deduct depreciation on your home, furniture or other personal items, land, livestock you bought or raised for resale, or other property in your inventory.

You can also elect under section 179 to expense a portion of the cost of certain property you bought in 2021 for use in your farming business. The section 179 election is made on Form 4562.

Special depreciation allowance. For certain trees and vines bearing fruits and nuts, planted or grafted after September 27, 2017, and before January 1, 2027, you may elect to claim the special depreciation allowance at the time they were planted or grafted. Additional property placed in service in 2021 may qualify for the special depreciation allowance. See the Instructions for Form 4562 for more information.

Electing farming business. If you made an election not to have the business interest expense limitation apply, any property with a recovery period of 10 years or more held by you must be depreciated under the alternative depreciation system. For details, see Rev. Proc. 2019-8.

For information about depreciation and the section 179 deduction, see Pub. 946 and chapter 7 of Pub. 225. For details on the special depreciation allowance, see chapter 3 of Pub. 946.

See the Instructions for Form 4562 for information on when you must complete and attach Form 4562.