# Depreciation & Taxes



## Saltybee (Feb 9, 2012)

it is not even April yet so congratulations on that , unless you are talking about 2016 taxes.

Are you making hive products or reselling?
Google section 179 deduction, other wise 7 year to me.


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## Specialkayme (Sep 4, 2005)

I've never depreciated boxes, frames, bottoms or tops. I make most of my equipment (other than frames and foundation), and it ends up being fairly cheap. A bottom or top might cost me $5. If I depreciate the cost over the life of the equipment (probably would fall under a 7 year depreciation schedule), I might save a few hundred dollars a year in taxes, but not enough to justify the time and paperwork in my opinion (larger, more expensive items are different). But your mileage may vary. 

Yes, you SHOULD depreciate it yearly, if you're going to. 

Since I build my own, I expense the lumber, saw blades, and paint in the year that I acquire them, rather than depreciate them. I probably should depreciate anyway, but since I'm buying lumber and "using it" in the year I purchase it, I expense it.

As far as the end of the life, no you can not write it off as a loss. That's why you're attempting to depreciate it.


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## MoeC (Mar 10, 2017)

Saltybee said:


> it is not even April yet so congratulations on that , unless you are talking about 2016 taxes.
> 
> Are you making hive products or reselling?
> Google section 179 deduction, other wise 7 year to me.


2017 taxes. I'm just trying to set up all my excel sheets now and would have maintained woodenware in its own book.

The hive products, for now, are the honey. Eventually I will sell the wax in blocks.
I will be making hives bodies, etc. for sale and for my own use.

Eventually will sell Nucs, but next year the splits I make will be for increasing the business.


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## MoeC (Mar 10, 2017)

Specialkayme said:


> Yes, you SHOULD depreciate it yearly, if you're going to.
> 
> As far as the end of the life, no you can not write it off as a loss. That's why you're attempting to depreciate it.


For the hive components I would much rather not have to depreciate them. It just seems like an inventory/paperwork headache.

I know any tools I buy for the wood shop end would need to be depreciated. But that is a lot easier to manage.


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## Roland (Dec 14, 2008)

My accountant asked howlong the equipment lasts, and depreciated it slightly faster so that in case it did degrade faster, we where not caught with worthless equipment on the books.

Crazy Roalnd


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## texanbelchers (Aug 4, 2014)

Inventory you are selling will need to be kept separate from your working hives. They will be carried on the books as COGS at cost and are removed when sold. This doesn't get depreciated. If you need to use something, "SELL" it to yourself at cost.

Carrying worthless equipment is a pain and selling partially depreciated stuff is too. I would lean toward a full write-off in one year, but the numbers and your accountant will need to determine your direction. 

This is only my opinion; I'm not offering financial advice.


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## MoeC (Mar 10, 2017)

texanbelchers said:


> This is only my opinion; I'm not offering financial advice.


Oh I understand that. I am trying to get ahead of the curve before tax season. Reading generic business stuff is good, but there is very little stuff on the web specific to beekeeping.


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## Ian (Jan 16, 2003)

MoeC said:


> Oh I understand that. I am trying to get ahead of the curve before tax season. Reading generic business stuff is good, but there is very little stuff on the web specific to beekeeping.


Pretty sure there is a depreciation schedule set out to dictate these matters.


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## Saltybee (Feb 9, 2012)

Publication 946.
Publication 551.

Must reads if you are investing the time into taxes. Areas to consider; cost of your equipment to make wooden ware; home office; workshop. Separating hobby and business. Will you be using equipment for personal/ fun projects as well as business?

At one time a big part of my income was self employed, that is why I dug into taxes. Would not ,and do not do it for bees.


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## flyingron (Sep 14, 2017)

I guess you could depreciate it but frankly, the cost is so small it is almost certainly better (and it is allowable) to expense it in the year that you buy it.


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## Roland (Dec 14, 2008)

Is the OP in the beekeeping business as stated, or in the business of selling beekeeping equipment?

Crazy Roland


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## grozzie2 (Jun 3, 2011)

Ian said:


> Pretty sure there is a depreciation schedule set out to dictate these matters.


 At 15 bucks or so a pop an auditor would not question writing boxes off as an expense in the year of purchase. Even buying a thousand at a time, the per each column on the invoice is still the small number. The only reason I would see to put a thousand boxes down as a single purchase to be amortized would be because one has more expenses than gross income and wants to carry the box purchase over to a future tax year on a depreciation schedule.


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## sqkcrk (Dec 10, 2005)

MoeC said:


> For the hive components I would much rather not have to depreciate them. It just seems like an inventory/paperwork headache.
> 
> I know any tools I buy for the wood shop end would need to be depreciated. But that is a lot easier to manage.


 Talk to an Accountant. One with some experience in Agriculture if you can find one.

How many hives did you purchase this year? How many colonies, nucs or packages? Did you purchase any other equipment? What about a truck? Or a building? Trucks and buildings depreciate over a matter of years. Supers can also be depreciated over a matter of years too. You can pick a reasonable depreciation term, 5 or 10 years.


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## sqkcrk (Dec 10, 2005)

How big an operation are you running?


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## MoeC (Mar 10, 2017)

sqkcrk said:


> How big an operation are you running?


Small. An upstart. Recently retired so I turned the hobby into business and started expanding.


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## MoeC (Mar 10, 2017)

Roland said:


> Is the OP in the beekeeping business as stated, or in the business of selling beekeeping equipment?
> 
> Crazy Roland


At this point beekeeping and making the woodenware for sale. Its a 1-man business run from home, with a few out yards on farms.

I'm still an upstart and gathering business info before I sit with an accountant which is why I asked about the depreciation of hive equipment. It seems like it would be a headache on a small scale and hoped that it wasn't the standard.


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## Saltybee (Feb 9, 2012)

MoeC said:


> . Its a 1-man business run from home, with a few out yards on farms.


That is where I would start; Home office; https://www.irs.gov/publications/p587, Many words to say "exclusive use" and be fair in counting beans, so many different ways to count beans. You might consider an office in your workshop area depending upon your layout. Home office gets your mileage meter started at your house. Make your first stop on any trip your bee stop, any other stop is incidental and remains a business trip (within reason).

Auto; you need the mileage log whichever method you use. Choose when filing.


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## MoeC (Mar 10, 2017)

Saltybee said:


> That is where I would start; Home office; https://www.irs.gov/publications/p587, Many words to say "exclusive use" ...


Oh yes, I'm familiar with this part of taxes. My ex-wife ran a home biz for awhile. There is also an exception to "exclusive use" of you are storing inventory & equipment in the home and have no other building for doing so.


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## Roland (Dec 14, 2008)

So you use some of your bee ware, and sell some of your new bee ware. The new bee ware does not decrease in value with time, but the bee ware you use does. I would inventory them separately, and only depreciate the bee ware you use.

Crazy Roland


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