[Code of Federal Regulations]
[Title 26, Volume 1]
[Revised as of April 1, 2004]
From the U.S. Government Printing Office via GPO Access
[CITE: 26CFR1.175-1]

[Page 203]
 
                       TITLE 26--INTERNAL REVENUE
 
    CHAPTER I--INTERNAL REVENUE SERVICE, DEPARTMENT OF THE TREASURY 
                               (CONTINUED)
 
PART 1_INCOME TAXES--Table of Contents
 
Sec. 1.175-1  Soil and water conservation expenditures; in general.

    Under section 175, a farmer may deduct his soil or water 
conservation expenditures which do not give rise to a deduction for 
depreciation and which are not otherwise deductible. The amount of the 
deduction is limited annually to 25 percent of the taxpayer's gross 
income from farming. Any excess may be carried over and deducted in 
succeeding taxable years. As a general rule, once a farmer has adopted 
this method of treating soil and water conservation expenditures, he 
must deduct all such expenditures (subject to the 25-percent limitation) 
for the current and subsequent taxable years. If a farmer does not adopt 
this method, such expenditures increase the basis of the property to 
which they relate.