Farmers may use certain favorable accounting rules. For instance, they may use the cash basis method of accounting and may deduct up to 50% of non-paid farming expenses as current expenses even though these expenditures are for inventories on hand at the end of the year. They also may deduct certain capital outlays, such as expenses for fertilizers and soil and water conservation if they are consistent with a federal- or state-approved plan. Generally, these special rules are not available to farming corporations and syndicates.
Origin: IRC §§ 175, 180 and 182 and Reg. §§ 1.61-4, 1.162-12 and 1.471-6
Tax Type
Tax Expenditure
Item Number
Item Name
Description
Origin
FY2016
FY2017
FY2018
FY2019
FY2020
Personal Income Tax
Accelerated Deductions from Gross Income
1.312
Expensing Certain Capital Outlays of Farmers
Farmers may use certain favorable accounting rules. For instance, they may use the cash basis method of accounting and may deduct up to 50% of non-paid farming expenses as current expenses even though these expenditures are for inventories on hand at the end of the year. They also may deduct certain capital outlays, such as expenses for fertilizers and soil and water conservation if they are consistent with a federal- or state-approved plan. Generally, these special rules are not available to farming corporations and syndicates.
IRC §§ <a href="http://www.law.cornell.edu/uscode/html/uscode26/usc_sec_26_00000175----000-.html" target="_blank">175</a>, <a href="http://www.law.cornell.edu/uscode/html/uscode26/usc_sec_26_00000180----000-.html" target="_blank">180</a> and <a href="http://www.law.cornell.edu/uscode/html/uscode26/usc_sec_26_00000182----000-.html" target="_blank">182</a> and Reg. §§ 1.61-4, 1.162-12 and 1.471-6
0.5
0.4
0.4
0.5
0.5
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