First of all, I don't think this is a stupid question.  It was a depreciation trap,that farmers fell into in the 80's.  If the depreciated item is never sold or traded, and the life of the item is over, and "parked in the grove" so to speak, you should not have any problems.  If the item is sold, that money is considered income, and must be reported with your other income.   Here is an example from the 80's: a farmer was going to sell out his machinery to his son for $200,000 and rent the land to him.  He was going to take the $200,000 and build a new house.  He checked with his tax accountant, and he was warned that he had better not do that.  He would lose half of the money to taxes and would not have enough to build his house.  Also, in the 80's, farmers that were forced to sell out, found out that the money they got from the depreciated items had to go to the bank to pay off debt, and the same amount of money was added to their income and they had to pay Federal and State income tax on it.