Agricultural cost segregation

Farms have a faster depreciation playbook than commercial property.

Single-purpose ag structures recover over 10 years instead of 20. Farm fencing recovers over 7. Tile drainage and irrigation are 15-year. Combined with 100% bonus depreciation, an agricultural cost segregation study captures meaningful Schedule F deductions that most farm CPAs miss because they're not engineering-trained.

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Agricultural & farm property

Single-purpose agricultural structures get 10-year MACRS treatment.

Single-purpose agricultural and horticultural structures (greenhouses, milking parlours, livestock barns, grain bins) qualify for 10-year MACRS under IRC §168(i)(13) — plus 100% OBBBA bonus depreciation.

Beyond the structures themselves, fencing, irrigation, drainage tile, paddock infrastructure, and ag-use roads all get 15-year treatment. Even modest farm acquisitions often reclassify 30%+ of basis.

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10-year SPAS classificationSingle-purpose agricultural structures qualify under §168(i)(13).

What we reclassify on farm and ranch property

10-year single-purpose ag structures

Dairy barns and milking parlors
Hog confinement buildings
Poultry houses and broiler buildings
Commercial greenhouses
Specialty livestock structures

7-year property

Farm fencing (perimeter, cross, paddock)
Grain bins (in some configurations)
Loafing sheds and movable shelters

15-year property

Tile drainage systems
Irrigation infrastructure
Farm roads and lanes
Manure-handling systems

Why this matters under OBBBA

100% bonus depreciation applies to property with a recovery period of 20 years or less. Every component on this page qualifies.

Class	Recovery period
Single-purpose ag structures	10-year
Farm fencing	7-year
Tile drainage / irrigation	15-year
General-purpose ag buildings	20-year
Land	— non-depreciable —

Sample — $2.5M dairy operation

~$1.5M+

First-year deduction when single-purpose ag structures, fencing, and tile drainage are properly classified and bonus depreciated.

FAQ

Agricultural cost segregation, answered

What is a single-purpose agricultural structure?

Single-purpose agricultural or horticultural structures (defined in IRC §168(i)(13)) — buildings specifically designed for the housing, raising, and feeding of livestock or for the commercial production of plants — qualify for 10-year MACRS recovery instead of 20- or 39-year. Examples: dairy barns, hog confinement, poultry houses, greenhouses.

How is fencing depreciated on a farm?

Agricultural fencing is 7-year MACRS property — substantially shorter than land improvements (15-year) on commercial property. This makes farm fencing one of the easier wins in an agricultural cost segregation study.

What about a farmhouse used as residence?

The farmhouse, if used personally, is a non-depreciable personal residence. If used as employee housing for farm hands, it can be depreciated as residential rental (27.5-year). The cost segregation study scopes only depreciable property.

Does Section 175 (soil and water conservation) interact with this?

Yes. Some soil and water conservation expenditures qualify for current deduction under §175 and are not subject to MACRS. Cost segregation works alongside §175 — your CPA will allocate items to the appropriate provision.

Farms have a faster depreciation playbook than commercial property.

Single-purpose agricultural structures get 10-year MACRS treatment.

What we reclassify on farm and ranch property

10-year single-purpose ag structures

7-year property

15-year property

Why this matters under OBBBA

Agricultural cost segregation, answered

Free feasibility on your farm or ranch