Taxes

[heart k ranch]

I don't know what I'm doing. I don't know what I'm doing..GRRRRRR

First my grandmother is helping me and then when I asked her to look over it she tells me its wrong. She circles it. why did she tell me to do this if she isn't going to show me everything.

Last year she made me put the mini horses as a business. The tax guy keeps tells me that I need to show income?!?!?! I ask him what do do and he said to talk to my grandmother?!?!?!!?

I did all my statments on the quicken2002 thing, the money is in order but the farrier, vet, and farrier isn't enough as I thought, but I put them excatly as they go.

I don't know what to do!

 

[Charley]

taxes....yuck

If you aren't running your farm as a business, do not claim it as one. If you don't have income it can trigger an audit of your return usually not this year but three years from this year. If your horses are a hobby you can claim the income and deduct expenses only up to the amount of the income; you cannot take a loss.

I know people tell others all the time that they can deduct the losses. But don't believe them. You can only deduct the losses if you run the farm as a business venture trying to make money...separate bank account, separate books, with a business plan.

 

[txminipinto]

Yup, you must have an income. Be it stud fees, selling foals, etc but you must operate it as a business.

 

[Littleum]

If you do not know what you are doing, get a CPA to help you the first year. You do NOT want an audit. You do NOT want the IRS coming back at you in 2 years for thousands in back taxes and boo boos.

 

[heart k ranch]

I talked to the guy that does the taxes for me. He said that I need to show income this year. He said that I should do this as a business, to get more taxes back. I just hope to God I don't get audited. The guy said that I shouldn't worry.

I am trying to run this as a business but I'm trying to get my herd numbers up. After Ringo gets here I won't be buying anymore for a long time

 

[Bluerocket]

You have to show a profit 2 out of 7 years -- a sliding scale -- and yes they DO/CAN audit you. I have been audited 5 times and passed the audits.

IMO You should get professional help to get this set up right - and to be there if you are ever audited.

I use H&R Block and pay the extra to have them participate in an audit if there is any.

After a few years you could do it by yourself.

JJay

 

[heart k ranch]

You have to show a profit 2 out of 7 years -- a sliding scale -- and yes they DO/CAN audit you. I have been audited 5 times and passed the audits.

IMO You should get professional help to get this set up right - and to be there if you are ever audited.

I use H&R Block and pay the extra to have them participate in an audit if there is any.

After a few years you could do it by yourself.

JJay

The guy that is doing is a CPA. He knows his his stuff. I won't do it alone for all the tea in china

 

[Charley]

Good for you!! You won't regret setting it all up legit!!