Exceptions are explained in Publication 225. Q. I fixed the roof on my barn. A. A repair simply restores an item but doesn't add to the value or increase its useful life. A capital expense, on the other hand, does add to the value or increases the useful life. However, if you put on an entirely new roof, you have a capital expense.
Repairs are deductible business expenses.
Capital expenses are not deductible, but in some cases may be depreciated. You may include Commodity Credit loans in income the year the crop is sold, or you may choose to include them in income in the year which the proceeds of the loan are actually received. Once you report these loans in the year received, you must continue to report all succeeding loans in the same way unless you get permission from the IRS to change methods. Q. I rented part of my farm land, but I have nothing to do with the operation of it. A. No, because in your case you did not materially participate in the production or management of production of farm products on the land.