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Message
how do write off's work?
Posted on 2/19/14 at 6:32 pm
Posted on 2/19/14 at 6:32 pm
lets say i owned some land and created a so called "farm" with livestock.... if i bought a truck/tractor/mower for said farm, how much of this can you write off even though your main source of income is a totally diff profession?
Posted on 2/19/14 at 6:34 pm to sonoma8
I hope you're making some money with that tractor
Posted on 2/19/14 at 6:35 pm to sonoma8
you may want to consult with your CPA before you wind up with the IRS crawling up your arse
Posted on 2/19/14 at 6:40 pm to southernelite
didnt say i was gona go head first and do it....lets get that clear... but to write something off, you income has to be close to what your writing off? I guess thats my question.
Posted on 2/19/14 at 6:48 pm to sonoma8
The IRS has several tests. One is out of X number of years, how many years did the venture show a profit? Hobby, or legitimate business. There are some other criteria also, but this is the main one.
Posted on 2/19/14 at 6:51 pm to Iowa Golfer
if its done as hobby and an LLC is created, is it even worth doing for the small amount worth claiming or is it better going cash money?
Posted on 2/19/14 at 7:02 pm to sonoma8
Whatever you do, don't take Spidey's tax advice on anything. A few weeks ago he said he was going to deduct a space heater he bought for his home.
Posted on 2/19/14 at 8:38 pm to sonoma8
Are you talking about a writeoff or a deduction?
Posted on 2/20/14 at 1:32 pm to foshizzle
IRS wants to see a profit in 3 out of 5 years. Taking big losses each year will eventually lead to questions from an IRS agent.
But assuming you really are a business, there is a whole set of depreciation rules for farms. If the farm isn't 100 percent business use, then the expenses of the farm that are attributable to personal use are not deductible.
I'd ask, though, what your goal here is? When I was working in Texas, it was the "in" thing to have a bunch of land out in the sticks, for weekend trips and what not, and put a few cattle/chickens out there so that way you could claim the agricultural exemption for property taxes. However, most of the time, the people did not try to claim an income tax deduction.
But assuming you really are a business, there is a whole set of depreciation rules for farms. If the farm isn't 100 percent business use, then the expenses of the farm that are attributable to personal use are not deductible.
I'd ask, though, what your goal here is? When I was working in Texas, it was the "in" thing to have a bunch of land out in the sticks, for weekend trips and what not, and put a few cattle/chickens out there so that way you could claim the agricultural exemption for property taxes. However, most of the time, the people did not try to claim an income tax deduction.
Posted on 2/20/14 at 2:52 pm to LSUFanHouston
just asking because some guys at work was talking about it and i didnt fully understand how it worked. they wrote off trucks, tractors, etc, but full time they worked in a totally diff profession and said it was a good way to deduct mileage and equipment on taxes. No way lookin to get in trouble w IRS, just didnt make sense on how it worked. I didnt think owning 5 cows would be a way to call it a farm if your not technically doing anything with them.
Posted on 2/20/14 at 7:36 pm to sonoma8
Yea lots of people try to get around this
Posted on 2/21/14 at 7:16 pm to jimbeam
quote:
how do write off's work?
I don't know, but they're the ones writing it off...
Posted on 2/22/14 at 1:52 am to sonoma8
My family recently purchased about 50 acres and a home site in MS. My father was granted "farm" status as a tree farm.
Completely legit and his CPA is guiding him on a variety of deductions (mileage, tractor, etc).
Completely legit and his CPA is guiding him on a variety of deductions (mileage, tractor, etc).
Posted on 2/22/14 at 6:50 am to DaStain
I got a laugh the other day when I saw something like a high end 6 series BMW with a Montana farm vehicle tag here in BR.
Posted on 2/22/14 at 7:25 am to sonoma8
like any business it needs some legitimacy.
Livestock? cows? or something else
Need to buy, sell, and have normal expenses for the business.
Before you dive in- talk to a CPA
Don't just buy land for a deer hunting and think you can write it off as a business.
Have you considered creating a non profit organization and allowing some use of the land for other groups? churches, civic, scouts, schools etc?
Livestock? cows? or something else
Need to buy, sell, and have normal expenses for the business.
Before you dive in- talk to a CPA
Don't just buy land for a deer hunting and think you can write it off as a business.
Have you considered creating a non profit organization and allowing some use of the land for other groups? churches, civic, scouts, schools etc?
Posted on 2/22/14 at 8:22 am to 756
We've got a "pine tree farm" up in MS. Don't have to show a profit for like 13 yrs or something. Write off tractor, Mule, bulldozer, diesel, mileage.
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