Vineyard wind machine, what type of asset is this?

Forum|Forum|4 years ago
May 10, 2022
6 replies
37 views

Ive got a client with a vineyard. Shes going to be installing a wind machine to help keep her vines from freezing? I think that's the purpose.

Its a large structure, $50k, permanently attached to a cement slab (still needs to be poured), is this considered a land improvement? or how do I depreciate this thing?

ProSeries Professional

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Best answer by jeffmcpa2010

Lisa:

We deal with these a lot in central WA. I DO NOT think the wind machine is permanently attached to the slab. I have had many clients buy used wind machines and have them moved and re-installed in a new location - all it takes is a new slab.

I have always treated them a Farm Machinery and Equipment, 7 yr property for 2021, eligible for either section 179 or Bonus depreciation. That is the only way I have ever seen them treated in our area.

Jeff

Jim-from-Ohio

Intuit Community Champion

sounds like land improvements over 15 years but here is an article, though it does not discuss wind machines it does address equipment vs land improvements in the wine industry:

https://www.calt.iastate.edu/article/two-rulings-importance-wine-industry-0

dkh

Level 15

Vineyards are considered agriculture - correct so would it fall under single purpose ag building - 10yr depr ?

dkh

Level 15

btw - 10yr single purpose ag buildings are eligible for Sec179 😁

BobKamman

Level 15

The citrus orchards we used to have in irrigated parts of Phoenix had something like that. They looked like big airplane propellers on a 15-foot tower. Purpose was to keep the air moving so the cold air would not settle in one place. I wonder if you have two orthree separate items to depreciate -- the foundation; the tower; and its machinery.

Camp1040

Level 10

I don't see it as improving the land, it is a piece of machinery that improves the harvest and helps prevent loss of product from the weather, are smoke pots and bird netting land improvements? This asset seems like it could be classified for the best result for the taxpayer, one big gray area. My opinion is machinery.

IRonMaN

Level 15

Since I don't do anything farm related (other than eat food that comes from farming anyway), I looked at the post and thought it sounded like equipment to me. So I like Camp's answer. It might be wrong, but I like it 😜

Slava Ukraini!

qbteachmt

Level 15

These are not "wind" so much as "stirrer" with short blades and a lazy rotation They keep the cold air from settling in one spot to avoid creating frost. They are not super tall, because cold air settles along the ground. They can be electric or diesel. They don't really have any building, and often a pole, not a tower; like a large flag pole sunk into concrete. We had them in the citrus and avocado orchards where I grew up. I found something from 1995:

https://lpg-apps.org/uploads/Modules/Library/951-citrus.pdf

In the cost analysis between this equipment and frost insurance: "Wind machine benefits and costs are estimated for a 15 year period. Wind machines last longer, but this is a typical machine life used for tax reporting and assigning a salvage value to the wind machine at year 15 is equivalent to analyzing the feasibility for the entire lifetime of a wind machine. With competitive markets, any profits after year 15 are captured in the salvage value of the wind machine at year 15."

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J

jeffmcpa2010Answer

Level 10

Lisa:

We deal with these a lot in central WA. I DO NOT think the wind machine is permanently attached to the slab. I have had many clients buy used wind machines and have them moved and re-installed in a new location - all it takes is a new slab.

I have always treated them a Farm Machinery and Equipment, 7 yr property for 2021, eligible for either section 179 or Bonus depreciation. That is the only way I have ever seen them treated in our area.

Jeff