Lost a Cow Yesterday

[Gators Rule]

One of the reasons we buy and sell some cattle. For the express reason that if we lose one, it is a bought one. My son's tax guy keeps up with all the rules, and if you raise it you can't write it off, but if it is bought it gets treated different for tax purposes. Different with depreciation.... we get screwed enough, so we figure that if we lose one, it has to be a bought one that can be written off. This was suggested by our tax guy.....

Jan, I think your tax professional is correct regarding cows being purchased or raised by the farm. I do know a family where both father and son raise cattle individually. Every year the son will purchase replacement heifers from his father's herd, and vice-versa, just so they can write off cows that die during a subsequent year.

 

[Hunter]

One of the reasons we buy and sell some cattle. For the express reason that if we lose one, it is a bought one. My son's tax guy keeps up with all the rules, and if you raise it you can't write it off, but if it is bought it gets treated different for tax purposes. Different with depreciation.... we get screwed enough, so we figure that if we lose one, it has to be a bought one that can be written off. This was suggested by our tax guy.....

Jan, I think your tax professional is correct regarding cows being purchased or raised by the farm. I do know a family where both father and son raise cattle individually. Every year the son will purchase replacement heifers from his father's herd, and vice-versa, just so they can write off cows that die during a subsequent year.

Maybe I need to start doing this.
Would it be frowned upon to buy a few from a relative and sell a few to that relative for the same price?
If the farms are connected does one really even need to separate the bought or sold cows or can they stay where they currently reside?

 

[Gators Rule]

One of the reasons we buy and sell some cattle. For the express reason that if we lose one, it is a bought one. My son's tax guy keeps up with all the rules, and if you raise it you can't write it off, but if it is bought it gets treated different for tax purposes. Different with depreciation.... we get screwed enough, so we figure that if we lose one, it has to be a bought one that can be written off. This was suggested by our tax guy.....

In their particular case, the ranch's are across the dirt road from each other
Jan, I think your tax professional is correct regarding cows being purchased or raised by the farm. I do know a family where both father and son raise cattle individually. Every year the son will purchase replacement heifers from his father's herd, and vice-versa, just so they can write off cows that die during a subsequent year.

Maybe I need to start doing this.
Would it be frowned upon to buy a few from a relative and sell a few to that relative for the same price?
If the farms are connected does one really even need to separate the bought or sold cows or can they stay where they currently reside?

 

[NonTypicalCPA]

Sorry folks, the IRS figures this one out long ago. Losses between related parties are disallowed.

 

[farmerjan]

We legitimately buy some cows every year. Have stockyard invoices and all. Sometimes it is just because they are good buys and we figure we can get more out of them in 6-8 months with the sale of the calf. It is some speculating. But it helps that when a cow dies she is mostly always a bought cow and that stands to reason since we seldom lose many of our own since they have had little or no stress like a bought cow does. Of course, that doesn't count the 3 1/2 yr old first calf heifer I found out flat dead a couple weeks ago. But for the most part, anything we lose is a bought cow......