Final answer:
The statement regarding uniform capitalization rules and the ADS straight-line method in farming is false, as exceptions exist allowing different methods of cost recovery, depending on the business's qualification for exemptions.
Step-by-step explanation:
The statement that in a farming business, if the uniform capitalization rules are not used, cost is recovered using the ADS straight-line method is false. The uniform capitalization rules (UNICAP) under IRC Section 263A generally require capitalization of all direct costs and certain indirect costs attributable to property produced or property acquired for resale. However, there are exceptions that allow certain small business taxpayers to be exempt from UNICAP rules, particularly if they meet the gross receipts test which allows them to use the cash method of accounting where capitalization is not required. Cost recovery for assets in such businesses can be under different methods including various methods of depreciation, not just the ADS straight-line method.