How To Allocate A Land Purchase?

I was recently asked the following question. " Paul, you cover depreciating improvements on land. I am buying 150 acres in north-central Iowa that is bare ground. It has two county main tile lines running through it, has a blacktop road on one side and a gravel road on another. I am paying $705,000 for the farm. 15 acres are in CRP because they are wet. What percentage can you typically deduct for roads, tile, etc?” When you purchase 150 acres of farm land, you are, as in this case, actually purchasing many components that need cost … [Read more...]