DAPNET Forums Archive › Forums › The Front Porch › Off Topic Discussion › Drafts and taxes?
- This topic has 24 replies, 11 voices, and was last updated 13 years, 9 months ago by
Joshua Kingsley.
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- February 15, 2011 at 11:24 pm #42453
near horse
ParticipantAnyone that’s using animal power in a business, how do you handle/report stuff related to your animals on your taxes? Including new acquisitions, equipment, feed, maintenance etc. Any issues with the IRS? If you’re uncomfortable posting to the open forum, you can PM me – I do understand also if it’s a topic some don’t want to discuss.
February 15, 2011 at 11:50 pm #65748Scott G
ParticipantGeoff,
I deduct all of my draft related expenses to the forestry biz as they are dedicated to that purpose. They are very legitimate deductions.
No issues from the IRS but I am a very small fish in a very large pond. Wouldn’t be worth their time…
February 16, 2011 at 12:42 am #65754john plowden
ParticipantI do as well –
February 16, 2011 at 1:36 am #65755Does’ Leap
ParticipantDitto for us. They are a farm expense. Feed, equipment, vet, etc, etc…No issues from IRS. As long as you claim income from a business and you use your horses as part of that business, you should be all set.
George
February 16, 2011 at 3:06 am #65761dominiquer60
ModeratorThis will be my first year claiming both cattle and dog as working animals, both tax preparers that I questioned say that there is no problem in doing so as long as they are part of the business.
ErikaFebruary 16, 2011 at 4:30 am #65739Carl Russell
ModeratorI claim those expenses as Working Animal Expenses, and write them in additional expenses on the back of my schedule C, along with other expenses specific to my business, like chainsaw and equipment exp, or forestry supplies.
Carl
February 16, 2011 at 5:50 am #65756ParticipantThe concern is “that look” the tax folks or accountant gives me when I bring up using horses. They don’t seem to see it much at all I guess.
Sorry if I’m a little slow but where/how do you claim your team? Do you treat them similar to say a tractor or skidder? You know, claim some 179 deduction and depreciate some of the value. The reason I ask is a team tends to “appreciate” in value up to a point. So how does one estimate the “value”?
Most of the other stuff (vet costs, tack, feed) makes sense but the horses, mules or oxen are the part I can’t get straight.
BTW – I file Sched F not C but I don’t have a forestry biz.
Thanks for sharing.
February 16, 2011 at 10:57 am #65740ModeratorI don’t depreciate them, they are a one time purchase and I completely expense them in the year they are purchased. That is why I itemize the draft animal expense separately, so that it shows how the animal expense is different than other “equipment”.
I file Schedule F, and two schedule C’s for each of my other non-farm businesses. These days I expense the draft animals from the farm because they are used for more income generation from our own land as opposed to commercial logging.
Geoff, I did think about this some a few years ago though when I bought a 3 month old stallion for $500. That was the only expense I claimed for him, but within a year he was worth $1000, and by the time he was working at 4 years old he was probably worth $2000. I just figured that was value IRS didn’t need to know about.
Carl
February 16, 2011 at 10:58 am #65745Livewater Farm
ParticipantI file schedule F and treat them the same as the cows and or other equipment
BillFebruary 16, 2011 at 1:07 pm #65750Jim Ostergard
ParticipantI also deduct all the expenses for the horses against my logging income. I was told by a tax preparer that I had to depreciate the horses. I did that with Rusty but claimed Zeb ($500) as a one time purchase like a chain saw in the year I bought him.
JimFebruary 16, 2011 at 1:32 pm #65746goodcompanion
ParticipantI usually use a deferred collateralized security tranche of each horse in an amortized hay annuity-based debt retained revenue expenditure obligation, plus a 15% accrued capital income dividend allowance for each hoof I haven’t trimmed since I’m busy filing taxes.
Plus if the barnyard is wet in April I consider the assets to be offshore.
February 16, 2011 at 1:44 pm #65741Moderatorgoodcompanion;24974 wrote:I usually use a deferred collateralized security tranche of each horse in an amortized hay annuity-based debt retained revenue expenditure obligation, plus a 15% accrued capital income dividend allowance for each hoof I haven’t trimmed since I’m busy filing taxes.Plus if the barnyard is wet in April I consider the assets to be offshore.
:eek::eek::D
Carl
February 16, 2011 at 3:29 pm #65749Participant@goodcompanion 24974 wrote:
I usually use a deferred collateralized security tranche of each horse in an amortized hay annuity-based debt retained revenue expenditure obligation, plus a 15% accrued capital income dividend allowance for each hoof I haven’t trimmed since I’m busy filing taxes.
Plus if the barnyard is wet in April I consider the assets to be offshore.
Baffle them with Bullsh**!!
They do it to us so turn around is fair play in my book!!:D:D
February 16, 2011 at 3:42 pm #65757Participant@goodcompanion 24974 wrote:
I usually use a deferred collateralized security tranche of each horse in an amortized hay annuity-based debt retained revenue expenditure obligation, plus a 15% accrued capital income dividend allowance for each hoof I haven’t trimmed since I’m busy filing taxes.
Plus if the barnyard is wet in April I consider the assets to be offshore.
That’s exactly what I was thinking of doing – I think?:confused:
February 16, 2011 at 5:13 pm #65747ParticipantHope I brightened everyone’s day with my accounting b.s.! Seriously though that language does tick me off, especially when spouted by a bailed-out investment banker trying to justify their useless existence. Not one person–not one–prosecuted for the whole subprime debacle. Guess everyone, regulators included, were just doing a fine job keeping the economy running and the whole event sort of happened to them (and by extension to all of us) by accident, some kind of Act of God. Nothing anyone should have done differently. Sweet Mercy, someone give them a bonus, for the love of Pete.
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