Upon sale of the pasture, the net dollars available to the seller would be lower than the fair-market value due to income taxes and sale expenses. Historic returns to land have been in the 4 to 6 percent range as an annual return above all charges, except land. Returns to owning pasture may include capital gains as well as the annual income from renting the pasture. The average dollars spent annually for land improvements, including conservation practices, should be used. Depreciation life for buildings and facilities usually ranges from 15 to 30 years.
Fences are seven-year property.
Ponds may not be depreciable, and therefore they add value to the basis of land. Utilization of one-half the total investment value assumes a zero salvage value. This text was extracted from the publication, NCR-149.