Is a farm a good tax deduction? How many cows do I need to have a farm?
Vložit
- čas přidán 29. 06. 2024
- Is a farm a good tax deduction? How many cows do I need to have a farm according to the IRS? How much land do I need in order to be called a farm? I want to deduct my tractor & side-by-side, but I don't have any farm animals...can I do that?
These are all questions that we get a lot from clients that want to start a farm. Watch as Sarah explains the basics of what the IRS considers a farm & what farm expenses are allowable deductions.
You are so smart! Thank you for sharing your knowledge!
Thank you for helping make this process a little more black and white.
Great to know going forward.
Thank you for this video.
Very helpful video. Thanks for sharing. New subbie.
Hi.how are you? i am from Bangladesh.l like farming. I watch your video this is very fantastic. Nowadays farming developed all country.
Would have been great to know this before starting. Any way to go back in previous years and deduct expenses on fencing, corrals, livestock panels etc?
It’s possible.
Is there a link to this brochure you're showing in the video? This has been very helpful. Thank you!
www.sarahberrycpa.com/videos
The brochure can be found here on my website
So I purchased a 21 acre ranch and leasing half an acre to someone for hemp farm. I also have cattle and ag exemption on the farm. Income from the lease is reported but my question is. Can I deduct any equipment for the maintenance of the farm for both the lease and cattle. Also, I contacted the State comptroller in San Antonio asking for a tax exempt number so I can purchase equipment. They told me that I didn't qualify unless I was re selling equipment or things. What's the correct way to ask for a tax exemption for the farm.
Thanks for this video, what is the deductables web site you are referencing in the video?
I read that barn is depreciated over 20 years, but you said 39 years?
What if you have a permaculture vegetable garden and use your chickens for manure and cultivation?
If you sell your vegetable & you use the chicken manure in the garden, then I could see the "business purpose" behind the chicken expenses.
Is custom feeding cattle in a feedlot deductible. And if it is how would it help with taxes
Hi. Is it possible to apply depreciation expense on breeder bulls or breeder cows for tax deduction purposes?
Thank you!!
I purchased a small farm 5.74 acres in the Floresville Tx, Wilson County on 05/2014, since I have been here I have raised chicken for the sale of of eggs to the local community. I also make jams and jellies and crafts to sell at local farmers market. I have purchased a tractor and some implements and zero turn mower for the property. My plan in the near future is to establish a garden and add to my product base. I have not made the farm and LLC. I do have my ag exemption for sales tax. Where should I begin. thank you in advance.
A "farm" is a business. A "hobby farm", even if you make a few bucks here and there is just for fun. A business is made legitimate through registration as an LLC or Corp and keeping logs of all activities, expenses, filing taxes as a business etc. Not a CPA, just learned the hard way.
Do I have to list the registration numbers on cows ?
Do you have to have a separate bank account when starting to show the cash flow in and out, also do you have to have a receipt showing the purchase of livestock?
No, you don't have to start a separate bank account for the farm. If the farm is very big & brings in much money, I think it is a great idea to have a separate bank account, but it is probably not feasible when the farm is just starting out.
Yes, you need to keep receipts for all farm purchases & income.
@@SarahBerryCPAPLLC
Thank you!!
I have an LLC but not for farming. I have a plan to farm and make a profit. In fact, I've started some fencing and preparing for goats and sheep. Can I farm under my current LLC or do I need to start a separate LLC Business?
If your current LLC doesn’t have any activity in it, then it’d probably be okay to use it. But if your current LLC is a different and active business, you may not want to run both activities through the LLC. Strictly for asset protection. But this question needs to be explored with your CPA and attorney.
What if you are using your chickens to help your farm to yield food?
As long as you have a business plan that shows how the chickens help generate income for the farm over-all...then I think it is a feasible deduction!
If I took deductions through the years of production and then sell, do the deductions translate into a tax debt?
This is a loaded question with lots to unpack. It is not just a YES or NO answer. You would need to seek out a experienced tax preparer for this & make sure you fully explain what assets were bought, when they were bought, how much was paid for them, etc. Then explain deductions taken over the years. Then explain when the assets are sold & how much they were sold for.
You only need 2 Male and a female other wise you might as well pay the taxes it will be cheaper
Can I offset my software engineering income with farm loses?
Yes and even spouse, so if you owe on your day job and have loss with farming you can.
IRS is wise to 'hobby farms'.
ofrom a variety of products. There was no "sizing up" to hobby farms. It is a legal IRS category. Your comment shows more about you than it does about all those sneaky little homesteaders.I think demagoguery and homesteads who sell at Farmer's Markets but use their land for raising 90% of their own food do have legitimate business models that the IRS recognizes. The term hobby farm used to mean that they did not make 100% of their income, but did make at least $6k gross each year on
Awful...substitute rather than correct. Aweful.Sorry for Amazon Kindle Fire response. You can't see it until it posts and they choose words to substitue.
@@dianneiverglynne
Kindly put, there's little point in discussing your statements of past IRS hobby farm determination, both since they are uncited and because they are at best passe. In future, you might do well to stick to germane issues, supported by cite.
Your two posts are also nearly unreadable. As such, you may need to brush up on the English language before using it to review IRS regulations and guidance ....or using it to post. When you come up to speed, a set of applicable cites follows, with the last noting the TCJA(2018) loss of much of hobby farm expensing:
www.irs.gov/pub/irs-pdf/p225.pdf
www.irs.gov/pub/irs-pdf/p535.pdf
www.irs.gov/newsroom/hobby-or-business-irs-offers-tips-to-decide
agfax.com/2019/05/08/taxes-does-the-irs-consider-your-farm-a-hobby-or-a-business/
www.chillicothegazette.com/story/news/2019/11/17/hobby-farming-and-taxes-what-my-options/4189769002/
@@edhuber3557 the IRS is not wise to anything. They are simply a compliance/enforcement agency that preys on the people.
It’s quite disgusting how the FedGov works to separate people from their hard earned capital.
Smart folks or those who employee knowledgeable CPAs will legally work thru these traps set up to make otherwise law abiding people, criminals.
@@HarrisonCountyStudio Not necessarily 'wise', as in smart. 'Wise to' as in aware of and watching for incorrect farm write-offs.
Moreover, mine was a positive-not-normative statement. In the positive sense, it is simply a fact that the IRS watches for hobby farms without provable profit intent (by either safe harbor, or by 9-factor qualitative test). Even a farm-savvy CPA cannot create a business of that which loses money year-in-&-out, and is clearly a hobby. On the normative side, I'd agree that the government takes too much in taxes, and that the restrictions (through 2025) on hobby expensing are too much. However, I don't share the 'conspiracy' slant.
Yes, the IRS is watching and 'wise' to hobby farms. Flaunt that watchful eye if you wish.
I have uploaded the brochure to my website here:
www.sarahberrycpa.com/videos