Farmers may deduct expenditures for ponds and drainage ditches rather than capitalize them.

Question

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According to IRS guidelines, farmers may deduct expenses for constructing or improving ponds, drainage ditches, or other land improvements as long as they are not considered to be permanent structures. This means that these expenditures can be deducted in the year that they were incurred rather than being capitalized and depreciated over time.

Farmers May Deduct Expenditures for Ponds and Drainage Ditches Rather