FAQ
How much can you write off for farm equipment?
The amount you can write off for farm equipment depends on which tax provision you use, and for 2026 that mainly means Section 179 expensing or bonus depreciation, both of which can allow a substantial first-year deduction.
Under Section 179, you can generally expense up to $2,560,000 of qualifying equipment purchases in the year you place them in service, though that limit begins phasing out once total purchases for the year exceed $4,090,000. Bonus depreciation for 2026 sits at 20% for most qualifying farm property, and it can be used on top of Section 179 for amounts you don't fully expense. If you use neither election, equipment still depreciates under MACRS: new farm machinery is typically 5-year property, and used machinery is generally 7-year property.
A few conditions matter regardless of which method you use:
- The equipment must be used more than 50% for business purposes to qualify for Section 179 or bonus depreciation.
- Section 179 deductions are capped at your taxable business income for the year; they cannot be used to create or increase a loss.
- For Section 179, the equipment must be new to your business, even if it was previously owned by someone else.
These rules change from year to year, and how much you can actually claim depends on the specific asset's cost, its placed-in-service date, and your total equipment purchases for the year, so it's worth confirming the current-year figures with your tax preparer before filing.
One thing depreciation schedules can't tell you is what the equipment is actually worth today, which matters for insurance coverage, loan collateral, a partnership buyout, or an estate. A farm equipment appraisal establishes that current fair market value with a USPAP-compliant report, whether you're documenting a tractor purchase for financing purposes or need a valuation tied to an estate or transition. If depreciation and current value need to line up for a specific filing, our farm equipment appraisal for loans service and tractor appraisal page cover common scenarios where that documentation is requested.