Tax incentives for investements agriculture vs multi family

[Michael Botha]

We are interested in diversifying our investments and investing in the live animal production agricultural sector in MT and or surrounding states. We are presently considering cow/calf live stock production with the goal to acquire ranch land suitable for a 1,000 animal unit operation. Initially we will lease ranch land and contract with a cutom grazer to raise our herd(s). Once we have a herd and calf crop that is sufficiently productive to finance the operation we will acquire the ranch land. We are also considering starting our own retail brand or partnering with an existing brand to market and sell direct to consumers. My question is: how do the tax incentives for an agricultural operation as described above compare to investments in multi family housing? The big question is related to depreciation, since a lot of equity will be tied up in ranch land, which is non depreciable; are there other tax incentives that sweeten the deal? Any comments are welcome.

[Michael Botha]

Hi Eamonn

Thank you for your very detailed and helpful response, your advice is most appreciated.  You have already provided a great deal of information and we do not wish to take up more of your time.  However if you or anyone else can offer thoughts on the following questions, we would be very grateful.

In one of the opportunity scenarios we are considering,  we may lease land for custom grazing, however we would be responsible for installing perimeter and cross fencing for the pastures that we will need for our herd.  In this case, are we able to depreciate fencing and or other equipment that we purchase and install on someone else land?

We are seeeking an agriculture tax expert for consulting purposes, preferably a CPA who is familiar with MT and the bison producing industry.  All referrals are welcome.  

Thanks 

MIke