Drafts and taxes?

DAPNET Forums Archive › Forums › The Front Porch › Off Topic Discussion › Drafts and taxes?

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  • February 22, 2011 at 1:52 pm #65751
    Marshall
    Participant

    I was thinking of writing mine off, but most everything was purchased a few years ago so I don’t know if it is too late or not.

    February 22, 2011 at 5:00 pm #65762
    Joshua Kingsley
    Participant

    @Marshall 25125 wrote:

    I was thinking of writing mine off, but most everything was purchased a few years ago so I don’t know if it is too late or not.

    you can do a transition aquisition that makes a “hobby” purchess into a farm asset. you will just have to estimate the value at the transition.
    Joshua

    February 22, 2011 at 5:36 pm #65758
    near horse
    Participant

    While I’m not an accountant nor do I play one on TV, I think I could make a pretty good argument for the value of my team. As I mentioned before, draft teams appreciate in value (to a point) unlike equipment. So it’s hard for the tax guys to say that you need to reduce the value you’re deducting because you’ve had the team for 2 years or whatever.

    OOPS – here comes the IRS.

    February 22, 2011 at 7:26 pm #65752
    Marshall
    Participant

    Joshua, I was always under the impression that you could only deduct items the year they were purchased. I will definitly check it out a little closer. Thanks!

    February 22, 2011 at 8:09 pm #65742
    Carl Russell
    Moderator
    Marshall;25134 wrote:
    Joshua, I was always under the impression that you could only deduct items the year they were purchased. I will definitly check it out a little closer. Thanks!

    When you own something personally, then put it into service for your business, you can claim that as a depreciated 279 deduction, especially since even though they are animals, they are considered equipment. Draft horses used in business are like cars, chainsaws, etc., unlike livestock for rearing and breeding, etc.

    Carl

    February 23, 2011 at 3:51 am #65759
    near horse
    Participant

    Carl,

    Sect 279 or 179? If it’s 279, where is that located?

    February 23, 2011 at 11:37 am #65743
    Carl Russell
    Moderator
    near horse;25158 wrote:
    Carl,

    Sect 279 or 179? If it’s 279, where is that located?

    Oh Shit, I was working from memory:mad: I’ll look it up to be accurate….. probably is 179???

    Carl

    February 23, 2011 at 1:36 pm #65753
    Marshall
    Participant

    Too late for me this year but I will definitly check it out for next year. Thanks to all for their input.

    February 23, 2011 at 3:35 pm #65760
    near horse
    Participant

    It’s fine Carl – I only ask because I’m in the midst of going back over our taxes for this year.

    Sec 179 is on the depreciation schedule – you can deduct up to the full value of equip etc the first year it’s put into service. The amount you deduct via 179 reduces the depreciation value by that amount.

    IMO, limited as my knowledge is, the amount you use in 179 is to have immediate impact on that year’s taxes.

    Arrgh – taxes.

    February 23, 2011 at 4:18 pm #65744
    Carl Russell
    Moderator
    near horse;25176 wrote:
    It’s fine Carl – I only ask because I’m in the midst of going back over our taxes for this year.

    Sec 179 is on the depreciation schedule – you can deduct up to the full value of equip etc the first year it’s put into service. The amount you deduct via 179 reduces the depreciation value by that amount.

    IMO, limited as my knowledge is, the amount you use in 179 is to have immediate impact on that year’s taxes.

    Arrgh – taxes.

    You are right, on all counts.

    Carl

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