Tax Question re: New barns, fencing purchases

[StarRidgeAcres]

I realize I shouldn't ask for tax advice on a forum, so I don't intend to rely solely on the feedback I get here. I'm considering hiring an accountant to do my taxes for 2012, which will be a first for me in many, many years.

But here's my question...

The pre-fabricated buildings I'm planning to buy and have installed at our new place will be for the horses' shelters. I will also be purchasing wood and other materials to customize the pre-fab units. There will also be purchases such as screenings (don't know if it's called that everywhere, but it's the stuff that goes down in a stall/barn under the mats, etc.), t-posts, eletric tape, solar boxes, wiring, water lines, etc. Is all of that stuff the type of things I should put on my Star Ridge Acres (I believe it's a schedule F if I'm remembering correctly) form as expenses? Are all those things taken "immediately" or are some depreciated (is that even the right word???) over time?

Again, I believe I'll need a professional this year, but would like a head's-up now as to what I may be facing come tax time.

Thanks!

 

[Riverrose28]

Well. I'm not going to be much help, but we installed our buildings and fencing before we started a business, so no help there. We use an accountant, I would be lost without her. I do know that broodmares depreciate over the years. We also can claim, expenses for showing, traveling, auction expenses, vet. problem with us is this, we are going out of business and back to being a hobby. My advice to you would be to save all of your recepts and get an accountant for taxes. That includs feed and hay if you are in the breeding business, and something I just learned after many years of only having homeowners and farm coverage is that you must also have commercial ins. coverage. It was only a few dollars more per year, but something I never thought about till my homeowner carrier said I must have it since we were running a business.

 

[Miniv]

Your accountant will be the one to help you. Just be sure to save ALL your receipts!

If you are claiming the horses as a business, there are certain steps you have to take........such as opening a ranch checking account, having business cards, etc.... Your horses, fencing, outbuildings/barns will be depreciated.

If you are doing this as a hobby it's handled differently, but you still want to save your receipts because a lot of things you are doing on your property would be considered "improvements". ....ie, fencing. But that would only be important for when the time comes to sell. Again, an accountant can explain.

 

[targetsmom]

For sure talk to an accountant and if you can find one that knows the horse business that is even better. The rules on depreciation change all the time so he/she would know what can be deducted fully the year you buy it and what needs to be depreciated. Your accountant MIGHT even have other ideas rather than a schedule F. I think, like Riverrose, we may be going back to being a hobby. Our business plan looked so good when we started out (and paid those high prices for our breeding stock). Of course, that was also when we had 2 incomes....