I own 11 acres of farm land in PA, used for crop land. I live full time in NC. I am about to buy a used excavator from a dealer and I want to take advantage of the farm tax exemption. Does anyone know what is involved with this?
What I was told was you had to file a schedule F and also the equipment had to be used to produce a farm product. Best to talk to who does your taxes.
I found that if the equipment is used for drainage ditches then it was exempt.
If I use the tax exemption for farm does that mean i cant write off the machine for my excavating business?
What account are you paying for the machine, if you want farm exemption, you should be paying for it with the farm account, not your business account, beware, in a lot of states construction equipment isn't considered farm anything, it could trigger an audit, best to first check with your tax man, I know of one individual that got audited, cost him over 50k by the time he was done, just for not paying sales tax on one machine which amounted to less than 5k in taxes. I have no idea what your tax laws are in your state, only my state, ask questions locally is you best option before doing anything.