Do you have/use a business plan?

[cypressfarms]

And buy low/sell high is not a plan.....

The he77 you say Cypress?? It equals profit, staying power and enjoying life.

Said tongue in cheek, I guess?

A real business plan is like mapquest. It tells you how to get from point A to point B, with B being profit. And saying your gonna buy low and sell high, isn't what I had in mind.

 

[TexasBred]

And buy low/sell high is not a plan.....

The he77 you say Cypress?? It equals profit, staying power and enjoying life.

Said tongue in cheek, I guess?

A real business plan is like mapquest. It tells you how to get from point A to point B, with B being profit. And saying your gonna buy low and sell high, isn't what I had in mind.

Excuse me. :help:

 

[backhoeboogie]

Why would you not have one?

even for a "hobby" or house hold budget a quick written plan makes sense, let alone for IRS purposes.

If you do not have plans how do you know costs of production, and how a change in costs etc effects you?
Break even point?

If the cow's checking account is in the red, they are below break even. I'll call a meeting, hand each member of the herd an agenda, and if we cannot reach consensus, some of them are going to be offered a retirement option or a pink slip.

My business plan is to make money. Drought and equipment failures interrupt the best laid plans.

I have never had to worry about showing losses to the IRS. I must be doing something wrong because they always want more money.

 

[backhoeboogie]

Holding your cost to $20K a year is the toughest part of all.
That's my plan every year. The tractor is a 70's model Massey. Fertilizer, meds, fuel, lease money, feed and equipment maintenance can take a lot of nickels out of your pocket. 100 head of good cows can produce a nice calf crop. Still you are looking at better than $50 - and at today's prices that is more around $75K.

It is extremely difficult to show a loss and I don't understand all the hoopla. If I am losing, I am getting out.

Year before last hay sales kept me out of the red. This past year I sold off a lot of animals. That put me deeper in the black - for the year.

 

[TexasBred]

Income on those sold this year because of the drought can be deferred. Might be worth checking into.

 

[backhoeboogie]

Lots of folks are planning on doing just that. I've about decided to just bite the bullet and go back slow versus buying back heavy. Don't see cattle prices dropping drastically for a couple of years anyway. 2011 did not produce a whole lot of nickels for me anyway outside of my day job.

 

[G.S.]

During a recent interview moment with the IRS, that very question was asked. You can bet I'll have one next time.

 

[Stepbystep]

During a recent interview moment with the IRS, that very question was asked. You can bet I'll have one next time.

Really? IRS asked to see your business plan? What does that have to do with taxes?

 

[3legdonkey]

During a recent interview moment with the IRS, that very question was asked. You can bet I'll have one next time.

Really? IRS asked to see your business plan? What does that have to do with taxes?

I was thinking the same thing, then I put on my auditor hat. If you are claiming expenses that are out of the ordinary as deductions it would make sense to look at your thinking before saying they were out of line. Your business plan should show your thinking around those deductions and how they play into your overall plan. For example if you claimed that the costs of supplies to plant fruit trees as a deduction that might be flagged. But if your business plan included feeding your cattle significant amounts of fruit before sale to improve their flavor (aka this was part of your sales plan to city folks) then it might make sense.

 

[Floyd]

Always gooid to dazzle the IRS employee with paperwork. Bankers have a need to have paper in their hands as well.

Keeps them from picking their noses in public.

 

[TexasBred]

Always gooid to dazzle the IRS employee with paperwork. Bankers have a need to have paper in their hands as well.

Keeps them from picking their noses in public.

Just be sure the information given those IRS folks and the bankers is accurate or you can still end up going to jail especially in the case of a bank who suffers a loss because he made you a loan based on the information you furnished.

 

[DirtyShame®]

For years I worked in the Texas Ag Extension Service. I worked as a specialist helping farmers, mostly beginining farmers, with FSA Fome & Home Plans and farm plans for bankers. I used an Excel model the ag eco students wrote in grad school. The model would replicate the FSA Farm & Home Plan and you didn't need a system 36 computer program to run it. You would be surprised how much easier it was to get a loan when you have it all laid out so you can discuss it with the lender. We added little bells and whistles that computed cash flow, percent cash flow and etc...I know I still have some examples of the model, but it was orginally written using Quatro Pro, then converted to Lotus, then converted to Excel...it needs to be re-written just using Excel..as it is now...takes many mb for the conversions..

 

[G.S.]

During a recent interview moment with the IRS, that very question was asked. You can bet I'll have one next time.

Really? IRS asked to see your business plan? What does that have to do with taxes?

I was thinking the same thing, then I put on my auditor hat. If you are claiming expenses that are out of the ordinary as deductions it would make sense to look at your thinking before saying they were out of line. Your business plan should show your thinking around those deductions and how they play into your overall plan. For example if you claimed that the costs of supplies to plant fruit trees as a deduction that might be flagged. But if your business plan included feeding your cattle significant amounts of fruit before sale to improve their flavor (aka this was part of your sales plan to city folks) then it might make sense.

They asked if we have a business plan. :arrow: :roll:

3legdonkey has it figured out... It's about deductions being valid or not; the examiner commented that they are looking at hobby farms closely. Luckily, we are not that. Lots of info out there; if you have questions about your own situation, it might be best to ask your accountant (or other knowledgeable person). :help: