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cattle ownership: personal property vs. business assets
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<blockquote data-quote="Jogeephus" data-source="post: 1000308" data-attributes="member: 4362"><p>Sounds like you kept it too simple. :lol2: </p><p></p><p>Forming another entity isn't going to solve anything but will only increase your overall tax filiing costs. Good record keeping is essential to any method you choose. Its just as effective to open a "farm account" and keep all your farm related stuff in there and this can be filed on the schedule F along with your personal return. If you have a corporation you will have to first complete this and file this return and then kick out the K1 form for your personal. If you get the first screwed up then your personal return will be messed up and you will have to deal with the IRS and state on two fronts to get it fixed. The other problem with having a corporation is the temptation to comingle money from time to time. To loan one money when it needs it. Its your money so it only seems reasonable that you could do this but this is a red flag and is not something they like you to do and can cause problems. Also, don't know if this is still the case, there for a while there was a lot of abuse in LLC's and these were auditted more frequently than other things.</p><p></p><p>IMO, unless you have some major assets you need to do some estate planning on or if you are open to some substantial risk, I wouldn't form another entity. In fact, if I had it to do all over again I wouldn't let anyone know I even owned a cow.</p><p></p><p>Just for the fun of it call the IRS office Monday and ask a simple question. After you wait an hour or so and you speak to one of the brilliant affirmative action hire they employ then make the decision if its safer to have one bird in the covey or several.</p></blockquote><p></p>
[QUOTE="Jogeephus, post: 1000308, member: 4362"] Sounds like you kept it too simple. :lol2: Forming another entity isn't going to solve anything but will only increase your overall tax filiing costs. Good record keeping is essential to any method you choose. Its just as effective to open a "farm account" and keep all your farm related stuff in there and this can be filed on the schedule F along with your personal return. If you have a corporation you will have to first complete this and file this return and then kick out the K1 form for your personal. If you get the first screwed up then your personal return will be messed up and you will have to deal with the IRS and state on two fronts to get it fixed. The other problem with having a corporation is the temptation to comingle money from time to time. To loan one money when it needs it. Its your money so it only seems reasonable that you could do this but this is a red flag and is not something they like you to do and can cause problems. Also, don't know if this is still the case, there for a while there was a lot of abuse in LLC's and these were auditted more frequently than other things. IMO, unless you have some major assets you need to do some estate planning on or if you are open to some substantial risk, I wouldn't form another entity. In fact, if I had it to do all over again I wouldn't let anyone know I even owned a cow. Just for the fun of it call the IRS office Monday and ask a simple question. After you wait an hour or so and you speak to one of the brilliant affirmative action hire they employ then make the decision if its safer to have one bird in the covey or several. [/QUOTE]
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