Can I claim the interest on a farm machinery loan?
On the sheet the buy option deducts the interest as it is paid and adds depreciation at the effective life and method you state, then apportions both for private use. Whether the interest is deductible for you is a question for your accountant, and the sheet states it as your assumption.
How does the sheet treat the interest on the buy option?
It deducts the interest as it is paid, year by year, at the rate in the bank loan offer you paste, and shows it in the deduction timing beside the depreciation. The interest is your own input, so the sheet never invents a rate or a deduction it cannot read from your paste.
Where does private use come in?
The farm and tax profile box takes a private-use share, and the sheet apportions the interest and the depreciation by it. A machine used partly off the farm carries a smaller deductible share, and the apportionment is shown on the sheet rather than buried.
Frequently asked questions
Does the sheet decide if my interest is deductible?
No. The sheet is a decision aid and does arithmetic on your own figures. It applies the interest and the depreciation you state, apportions them for the private use you state, and leaves the treatment to your accountant.
What does a blank rate or effective life do?
The sheet returns scope incomplete and names the field. It never defaults a rate or an effective life, because a guessed figure there would change which option looks cheaper in today dollars.
Related answers
- How do I compare two dealer quotes for the same tractor?
- How long should I finance a farm machine or tractor?
- What is a lease-versus-buy present value comparison?