By Jenny Moses
Pole barns are a popular and cost-effective solution for various agricultural purposes, such as storing farm equipment or housing livestock. But did you know that owning a pole barn can also provide you with tax benefits? By using your pole barn for business or rental purposes, you may be eligible for tax deductions and benefits. In this article, we’ll explore how you can use a pole barn for a tax write-off according to the Farmers Tax Guide from the IRS.
Using Your Pole Barn for Business Purposes.
If you use your pole barn for business purposes, such as storing equipment or as a workspace, you may be able to deduct a portion of the expenses related to the pole barn on your taxes. The IRS allows business owners to deduct expenses related to the use of a building, including depreciation, repairs, and maintenance. To qualify for a tax deduction, the pole barn must be used exclusively for business purposes.
For example, if you own a farm and use your pole barns to store your farming equipment, you may be able to deduct the expenses related to the pole barn on your taxes. This can include the cost of building materials, repairs, and maintenance. According to the Farmers Tax Guide, you can depreciate the cost of the building over a 20-year period if the pole barn is used for farming purposes. So, if the pole barn costs $50,000 to build, you can deduct $2,500 per year for 20 years. However, if you also use the pole barn for personal storage or other non-business purposes, you may not be able to deduct the expenses related to the entire building.
The Farmers Tax Guide is a publication provided by the Internal Revenue Service (IRS) that provides guidance on tax issues related to farming and agricultural activities. It covers a wide range of topics, including the tax treatment of income from farming, deductions and credits for farming expenses, and special tax rules for farmers.
Using Your Pole Barn for Rental Purposes
Another way to use your pole barn for a tax write-off is to rent it out for business or storage purposes. If you rent out your pole barns, you may be able to deduct expenses related to the rental activity, such as repairs and maintenance, on your taxes.
To qualify for a tax deduction, the pole barn must be used exclusively for rental purposes. If you use the pole barn for personal storage or other non-rental purposes, you may not be able to deduct the expenses related to the entire building. However, if you rent out the pole barn for at least 15 days per year, you can deduct a portion of the expenses related to the rental activity based on the percentage of time the pole barn was rented out.
According to the Farmers Tax Guide, if you rent out your pole barn for farming purposes, you may be able to qualify for special tax treatment. For example, you may be able to deduct all of the expenses related to the rental activity in the year they are incurred, rather than depreciating them over time. However, to qualify for this special treatment, you must meet certain requirements, such as providing significant services to the tenant or having a written lease agreement.
Consult with a Tax Professional
While using your pole barn for a tax write-off can provide you with significant tax benefits, it’s important to consult with a tax professional to ensure that you’re taking advantage of all available deductions and complying with tax laws. A tax professional can help you determine the best way to structure your pole barn use to maximize tax benefits and avoid any potential tax issues.
Pole Barn Tax (IRS) Farmer's Guide (2022) https://www.irs.gov/pub/irs-pdf/p225.pdf
Pole Barn Tax (IRS) Farmer's Guide https://www.irs.gov/publications/p225
Pole Barn Tax Write Off Discussion https://www.ar15.com/forums/general/Pole_barn_used_for_business_tax_write_off_/133-1603375/
Pole Barn Tax Write Off Discussion https://www.garagejournal.com/forum/threads/garage-and-taxes.103160/
Pole Barn Tax Write Off Discussion https://twitter.com/ryan91734780/status/1359906087957372931?s=46&t=RNE9ZG3KEY1LNaEX9kZtFQ