Do Farm Buildings Qualify for Section 179? Year-End Tax Guide 2025

Understanding New Tax Benefits for Metal Farm Buildings After OBBBA

Aaron Williams

December 8, 2025

If you're a farmer or rancher planning a year-end equipment purchase, you've probably heard about Section 179 deductions. But here's the question many agricultural producers are asking: do farm buildings actually qualify?

The answer might surprise you—and with the recent One Big Beautiful Bill Act (OBBBA) signed in July 2025, the tax landscape has changed dramatically in your favor. For the first time in years, farmers can potentially write off 100% of qualifying farm buildings in a single tax year.

At Indaco Metals, we've been manufacturing metal buildings since 1995, and we're seeing unprecedented interest from farmers and ranchers looking to maximize their 2025 tax benefits before December 31st. This guide breaks down exactly which farm buildings qualify, how the new rules work, and what you need to know before year-end.

What Changed with OBBBA? The 2025 Tax Landscape

The One Big Beautiful Bill Act, signed into law on July 4, 2025, permanently restored 100% bonus depreciation and significantly increased Section 179 limits. These changes apply to property acquired and placed in service after January 19, 2025.

Here's what that means for your farm:

Section 179 Enhancements:

• Deduction limit increased from $1 million to $2.5 million

• Phase-out threshold raised from $2.5 million to $4 million

• Both amounts indexed for inflation going forward

Bonus Depreciation Restoration:

• 100% bonus depreciation permanently reinstated for qualifying property

• Applies to tangible personal property with a recovery period of 20 years or less

• Reverses the phase-down that had dropped to 40% in early 2025

For farmers nationwide, this represents a massive opportunity to invest in farm infrastructure while significantly reducing 2025 tax liability.

Section 179 vs Bonus Depreciation: What's the Difference

Understanding these two deductions is crucial for maximizing your tax benefit. While both allow you to write off qualifying purchases, they work differently:

Feature	Section 179	Bonus Depreciation
Maximum Deduction	$2.5 million (2025)	Unlimited
Income Limitation	Limited by taxable income	No income limitation
Property Selection	Choose specific assets	All or none by class
State Conformity	Most states conform	Many states don't conform
Best For	Targeted purchases, income management	Large purchases, NOL situations

The strategic advantage? You can use both together—Section 179 first, then bonus depreciation on remaining costs.

What Farm Buildings Qualify for Section 179?

This is where many farmers get confused. Not all farm buildings qualify for Section 179, but certain agricultural structures absolutely do.

Single-Purpose Agricultural Structures (Section 179 Eligible)

A single-purpose agricultural or livestock structure must be designed, constructed, and used for housing, raising, and feeding a particular type of livestock or poultry. These buildings qualify for Section 179:

Livestock Buildings:

• Hog confinement facilities

• Dairy milking parlors

• Poultry houses (chicken coops, broiler facilities)

• Cattle feeding operations

• Specific livestock breeding facilities

Horticultural Structures:

• Greenhouses

• Mushroom production facilities

• Dedicated plant production buildings

Storage Facilities:

• Grain bins

• Feed storage structures

• Commodity storage facilities

Critical Requirement: The structure must be used solely for the livestock or produce housed there. If a single-purpose structure includes a work space for machinery, it must be solely used for stocking, caring for, or collecting livestock or their produce, or maintaining equipment used for the livestock in that structure.

What Disqualifies a Building from Section 179?

A farm building loses Section 179 eligibility if:

• It serves multiple purposes (e.g., a hog facility also housing chickens)

• It includes general workshop or storage areas unrelated to the specific livestock

• It's used as general machinery storage

• It has significant residential components

What About General-Purpose Farm Buildings?

Here's the good news for farmers: even if your farm shop or machine shed doesn't qualify for Section 179, it likely qualifies for 100% bonus depreciation under the new OBBBA rules.

General-Purpose Buildings (Bonus Depreciation Eligible)

Most farm buildings that don't meet the "single-purpose" test are classified as 20-year property by the IRS. Under OBBBA, tangible personal property with a recovery period of 20 years or less qualifies for 100% bonus depreciation.

This means you can still write off 100% of:

• Farm shops and machine sheds

• General equipment storage buildings

• Multi-purpose hay barns

• Workshop facilities

• Agricultural equipment shelters

Quick Reference: Which Buildings Qualify for What?

Building Type	Tax Treatment	2025 Deduction	Requirements
Grain Bin	Section 179	Up to $2.5M	Single-purpose storage
Hog Confinement Barn	Section 179	Up to $2.5M	Hogs only, dedicated use
Dairy Milking Parlor	Section 179	Up to $2.5M	Dairy cattle only
Chicken House	Section 179	Up to $2.5M	Poultry only, dedicated
Greenhouse	Section 179	Up to $2.5M	Horticultural production
Farm Shop	Bonus Depreciation	100% (unlimited)	Acquired & placed after 1/19/25
Machine Shed	Bonus Depreciation	100% (unlimited)	Acquired & placed after 1/19/25
Hay Barn	Bonus Depreciation	100% (unlimited)	Acquired & placed after 1/19/25
General Equipment Storage	Bonus Depreciation	100% (unlimited)	Acquired & placed after 1/19/25
Barndominium (Living Quarters)	Residential Real Estate	NO	Depreciated over 27.5 years

The Critical December 31st Deadline: "Placed in Service" Requirements

Here's where many farmers lose out on significant tax benefits: understanding the "placed in service" requirement.

What Does "Placed in Service" Actually Mean?

An asset is considered "placed in service" the date the asset is ready and available for use. For farm buildings, this typically means:

Qualifying conditions:

• Building is fully erected

• Doors and access points are functional

• Building is weathertight and secure

• Equipment or livestock can be stored/housed

Not sufficient:

• Simply ordering the kit

• Starting construction

• Having materials delivered

Can You Still Benefit This Late in the Year?

With December 7th already here, you have limited options for 2025 deductions:

Realistic for 2025:

• Smaller carport kits (12x20, 20x20) can be erected in a weekend

• Pre-engineered smaller structures with quick assembly

• Roof replacements and repairs (often immediately deductible as maintenance)

• Purchasing materials now for strategic 2026 tax planning

Challenging for 2025:

• Large barns or shops requiring extensive foundation work

• Complex custom buildings with long build times

• Structures requiring significant site preparation

Smart Year-End Strategy

Even if you can't complete construction by December 31st, there are strategic reasons to act now:

1. Lock in 2025 pricing before potential 2026 increases

2. Secure your position in build schedules for early 2026

3. Plan for 2026 tax year with fresh Section 179 limits

4. Avoid spring rush when demand spikes

Why Choose Indaco Metals for Your Farm Building Project?

As a trusted metal building manufacturer since 1995, Indaco Metals offers distinct advantages for farmers seeking tax-advantaged building solutions:

Engineered Quality

• Buildings rated for 90+ mph winds

• Designed for temperature extremes

• Proven durability through decades of service

Complete Building Kits

We manufacture and deliver fully engineered metal building kits that include:

• Metal roofing and framing

• All sheet metal components

• Required accessories and hardware

• Detailed assembly instructions

• Available in both truss frame and rigid frame options

Customization Options

• 17 color choices with durable Valspar® coating

• Custom sizes beyond our standard offerings

• Professional design consultation

• 3D Builder tool to visualize your project

Convenient Locations

Shawnee:

3 American Way

Shawnee, OK 74804

(405) 273-9200

Sand Springs:

17427 W 9th St

Sand Springs, OK 74063

(918) 419-6053

Hours: Monday-Friday, 8 AM - 5 PM

Disclaimer: This article provides general information about Section 179 and bonus depreciation as they may apply to farm buildings. Tax laws are complex and subject to change. Every farm's tax situation is unique. Always consult with a qualified CPA or tax professional before making purchasing decisions based on tax considerations. Indaco Metals does not provide tax advice.