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Cost Segregation for Agriculture & Rural Property
Agricultural property does not follow the commercial default. Farm buildings, single-purpose agricultural structures, land improvements and processing facilities each have their own recovery rules, and a study that treats a farm like an office building either leaves deductions unclaimed or claims them in the wrong place.
Where the value is in agricultural property
Engineering has completed studies for every commercial property type, from hotels to lumber mills.
- Farms
- Processing plants
Farm structures have their own classes
General-purpose farm buildings, single-purpose agricultural or horticultural structures such as specialized livestock buildings and commercial greenhouses, and farm land improvements are classified under different rules, generally shorter than the 39-year life of a commercial building. Whether a structure is single-purpose depends on its design and its actual use, and the study documents both.
Improvements spread across the acreage
Drainage facilities, wells, fencing, roads, bridges and paved areas are depreciable improvements, not land. On a working property they are spread across the whole site, and Engineering identifies and documents them rather than leaving them blended into the land account.
Processing plants and QPP
A processing plant pairs a building with equipment, process utilities and site work. Where the plant is used for a qualified production activity that substantially transforms a product, part of the building may qualify as qualified production property under §168(n), depending on the activity, the construction and placed-in-service dates, and the election. We are one of the only firms in the USA that can do a Production Property Study.
Commonly reclassified components
Representative of what an engineered study identifies in this asset class. Actual components and recovery periods depend on the property and are documented individually in your report.
What would a study find on your property?
Send the property details. Engineering prepares the estimate, and you receive a written, fixed-fee proposal within 24 to 48 hours.
Agriculture and Rural cost segregation questions
Still have a question? Ask Engineering.
Is a barn a 39-year building?
Generally not. Buildings used in a farming business are usually classified under the farm property rules rather than as 39-year commercial property, and a single-purpose agricultural or horticultural structure carries its own shorter recovery period. Whether a structure qualifies as single-purpose depends on its design and its actual use, so the study documents both.
Can a processing plant qualify as qualified production property?
It may, depending on the activity. QPP under §168(n) covers the portion of nonresidential real property used as an integral part of manufacturing, production or refining that substantially transforms a product, where construction begins after January 19, 2025 and before January 1, 2029, and the property is placed in service after July 4, 2025 and before January 1, 2031. Offices, administrative and other non-production space are excluded, and an election is required. See qualified production property studies.
Are tractors and farm equipment part of the study?
Machinery and equipment are usually already on the fixed asset ledger as separate assets. The study focuses on what tends to be buried in building or land accounts: structures, land improvements, process utilities and site work. We reconcile to your existing schedule so nothing is counted twice.
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