An asset like that would have to be depreciated over its useful lifetime. Ask your accountant.

I have a similar situation. I have three metal buildings ranging from 30x40 to 50x50 that are used for my business. My accountant said any tax benefit from claiming them would be small and would complicate things if I were ever to sell my house. I decided it was not worth it to mess with it. As previously said it is a depreciation over many years like 20 or something(not sure how many). So if you have a 20k building you get a $1000 deduction a year which doesn't save you $1000 it it saves you $1000 times your tax rate so a savings of $200-$300 per year. Then when you sell your house in twenty years and your shop is worth 20k and it's tax basis is zero you will have to pay taxes on a 20k gain. Overall seems like a giant hassle for not much savings.

For what it's worth, I am a CPA, but though I've studied tax regulations thoroughly, my professional focus is in accounting. So I highly recommend talking to a local CPA that does taxes full-time. Spending a couple hundred dollars now can save you a huge headache later.

However, I do have the following thoughts about your situation:

Claiming part of your personal property as a business expense is tricky and can often be a red flag that triggers an IRS audit (mainly because so many people don't do it correctly). You've got to have proper documentation showing the total expense and then allocating out the personal and business percentages. The easiest example is if you have a 3000 sqft house and run a business out of one room that's 300 sqft, then you can allocate monthly expenses (like electricity) to it using a 10% ratio. I would think the same concept could be applied to multiple buildings. Though it would be easier if you allocated the entire barn to the business and sub-metered it for utilities.

As for the actual purchase price, I'd recommend checking with a full-time tax professional. Businesses have a set depreciation schedule for their assets, which is normally accelerated (so you get the most in year 1 and then it declines in each subsequent year). Because it's co-mingled with personal property, you'd have to make sure and allocate everything out between the two (i.e. what's the value applied to the barn versus the main house in the total purchase price). Also keep in mind that this effects both sides of the equation. Mortgage interest, for example, would get allocated between personal and business, so only part of it would go into your personal itemized deductions and the rest would hit the P&L of the business.

Another thing to consider is that the property is correctly zoned. I'm not sure where you're looking at moving to, but I'd check that running a business out of the home is allowed. Otherwise your first federal tax return would be evidence against you in a local lawsuit.

You're very welcome. It was my pleasure!

Section 178 Deduction.IIRC.