I do a bunch of farmers here in Tennessee. You are correct. Our state has many farmer grants..some for buildings, some for equip... even some for pay of purchase of bulls. grant income should show up on Line 7. (it's kind tricky to get the 1099-G to end up there if you enter the 1099-G) sometimes I just do a drill down schedule on that line and manually tell what the grant is.
And you have to depreciate the asset at your cost... NOT your cost less the reimbursement/grant.
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