It’s important to keep tax implications in mind when you make any decisions as a property owner. Taxes aren’t the only factor to weigh, of course, but they are too important to just ignore entirely.  

With that in mind, we’d like to take some time to discuss how adding a new barn to your farm may be able to help your tax outlook. You’ll always want to consider your unique situation when making tax decisions, of course, and be sure to work with a tax professional to get the details just right.  

On the construction side of things for your new barn, there is no better partner than American Steel Carports, Inc. To see what you can create when building a barn with our team, start by using our Build & Price tool. You can also contact us at any time to get answers to your questions.    

Is a Barn a Tax Write-Off? 

Generally speaking, yes – there is a good chance that you will be able to write off the cost of building a new barn. If you own and operate an agricultural property and you need to add a barn to help with your business, that investment is likely to be seen as a tax-deductible expense by the IRS.  

As is always the case with tax matters, however, the devil is in the details. You can’t just take that at face value and assume that your barn will automatically be deductible. If you don’t meet the right conditions for taking a tax deduction – more on that later – you’ll be left without this valuable break when the time comes to file your taxes.  

You certainly don’t want to errantly claim this deduction only to find out later during an audit that it was not legitimate. Only when you have confirmed that you qualify should you go ahead and use this to improve your tax picture.  

Meeting the IRS Criteria 

Metting IRS criteria starts with operating a legitimate farming business. The keyword there is “legitimate”. You need to actually be engaged in farming activities for the purposes of making a profit in order to take the deduction legally. In other words, you can’t just build a barn on your property and then claim it was for a business when no such business actually operates with the intent to make money.  

Not only do you have to be operating a farming business, but you also need to be using the barn for an approved purpose. One such purpose is housing livestock. The barn could also be used for storing animal feed or equipment, or processing your crops after the harvest. This requirement eliminates the possibility of deducting your barn if it is really used as nothing more than a personal garage. It has to be a component of the operation of your business in order to qualify.  

If you do meet the requirements to take this deduction, you might want to consider depreciating the building over several years rather than taking the deduction all at once. This is a technique that you will likely want to engage with a tax professional on to make sure it is being used correctly. Essentially, you will spread out the amount that you get to deduct – the cost of the barn – so it can provide you with a tax break for the coming years instead of only in the first year. After all, this is an investment that is made with the long term in mind.  

Ongoing Deductions for Maintenance and Improvements 

You will likely need to provide some maintenance to this building over the coming years. That maintenance will be minimal if you go with a metal barn from American Steel Carports, Inc., but there will be a few things to do nonetheless.  

There is a good chance that the cost of those repair and maintenance activities will be deductible, as well. As long as the barn is being used for business, the cost of care for the barn will be a business cost and can be taken off your taxes. Again, all of these things need to be confirmed for your specific situation with a tax professional. 

Build a Custom Barn

You probably aren’t going to build a barn just for tax reasons. But if you are already thinking about adding a barn to your property, potential tax advantages could make the project even more attractive. Whether you are ready to get started or you’d like to gather more information, connect with American Steel Carports, Inc. today.