For Profit Business or Hobby Farm

[wendi leigh]

I would appreciate any input you all can provide on whether you claim your horse breeding operation as a for profit business or a hobby farm, and if you've ever been audited by the IRS.

Thank you.

 

[drmatthewtaylor]

Business.

The clients that I have that get audited have 6 figure salaries and write off big losses.

BTW, you don't have to make money, rather just show the attempt to.

Dr Taylor

 

[kaykay]

We have always claimed ours as a business. Farms are generally given longer to show a profit than regular business. You do have to keep good records but thats pretty easy.

Our feed store sends us a statement once a year etc.

We use 7 years to depreciate our horses and equipment like tractors etc.

Like Doc said you have to show an effort to make a profit such as advertising etc like any real business would do.

 

[Riverrose28]

We list our farm as a business, but it is not profitable, we have been in the red for the last four years. Yes we have been audited, but since we use an accountant he took care of it.

 

[targetsmom]

We run our farm as a business, breeding miniature horses. We also have another business (one that makes money LOL!) and we run them both the same way, as partnership LLCs. Our lawyer and accountant are priceless.