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Amortizing my engine rebuild

J

jturn36178

Member
All,
I had an oil pump gear bust and had to rebuild my to 35 ferg.
I spent quite a bit and am going to use as expense against farm income.
Is there a short explain on how many years I can depriciate that expense?
Thanks
Jim
 
I am no tax preparer but member Dave H on here is. What is quite a bit? I cannot imagine an oil gear and gaskets etc. being enough to depreciate. My accountant would log it in as general repair and write it all off at one. Now a complete overhaul of say $5-10000 might be a different matter.
 
I had planned on seeing my tax adviser but I spent over $1000 on a tractor worth only $3000 at best.
Just wondering before going.
Thanks
jim
 
I would suggest that you talk to a tax professional if you want an accurate answer. They know the rules and the tax laws. They also know the loopholes.
On this forum, you will get as many different answers as there are posters. This is a good place to ask about farming, tractors, and even construction. Not a good place to ask about tax and legal issues. There are a few knowledgeable folks on here with expertise in tax and legal issues, but they sometimes get lost in the tales of what Uncle Orville did back in '89 or Aunt Ethel did in '44.
 
I paid $1000. for a tractor I didn't relay want but the guy had spent many $ on it. He told me when he spent the money, it was a hobby not an investment. Both him and his wife said I did them a favor taking the tractor because they were forced to sell and move to a condo.
Dave
 
Don't think market, antique or any other value has anything to do with it. Its what you spent (make sure you can prove it). Beware that its business not a hobby. Meaning you have a farm and its legitimate.
 
Go to your Sch. F instructions. Depends on your cash/acrue selection as to how you depr it and where it's listed.
 
its a one time repair bill for one year and should fall under farm repairs. that's the way I see it. tax man knows best.
 
Instructions indicate that the size of the charge determines the location and how you handle it. If you change out your alternator it's on this year's taxes. If you redo the whole thing, you have to spread it out....read the instructions!
 
Go to IRS.GOV and read publication 225 chapter 7.
You will have to download it and chapter 7 is long.
 
unless you take it to a shop and have it done, you have several invoices for parts and supplies. I even deduct a full set of tires in one year.
 
my best quess is that you would expense all of it on this years taxes. Might be able to carry over some if you go negative. Thats what I cpa does currently but I have not gone negative yet....... Disclosure... he is trained and I am not.
 
I do not know if it is 2018 or 2019, but the expense allowance for capital purchases was raised to $2500, which means you could expense any purchase under that amount, even a whole tractor.
 
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