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Profit made off of cattle !
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<blockquote data-quote="Brandonm2" data-source="post: 429278" data-attributes="member: 2095"><p>TRUE, land does NOT always appreciate; but whether your land investment appreciates or depreciates the only time that it matters, for IRS purposes, is when you sell it and deduct the original purchase price for either a capital gain gain or a capital loss. People graze cows on $300,000 an acre property all the time. The IRS does not care about their lost opportunity costs. </p><p></p><p>The IRS DOES have beliefs. It is printed up in the voluminous tax code and the IRS's interpretations of that tax code as well as all the rulings made by in the past by the tax court. Smarter minds than you or I have already ruled how land may be treated on a farmer's 1040 Schedule F and if you will take the time to read the Schedule F instructions you will probably find their explanation as to </p><p></p><p></p><p></p><p>Of course. However remember that your farm may decrease it's tax liability by paying rent to the L.L.C. that owns YOUR ranch and your ranch L.L.C. will have to pay taxes on that "income". Then IF you want the money back(and for tax purposes the money had better be physcially present in the L.L.C.s account), the ranch L.L.C. will have to pay it to you in the form of salary or dividends. Then you will have to pay personal income taxes on that salary or dividends.</p></blockquote><p></p>
[QUOTE="Brandonm2, post: 429278, member: 2095"] TRUE, land does NOT always appreciate; but whether your land investment appreciates or depreciates the only time that it matters, for IRS purposes, is when you sell it and deduct the original purchase price for either a capital gain gain or a capital loss. People graze cows on $300,000 an acre property all the time. The IRS does not care about their lost opportunity costs. The IRS DOES have beliefs. It is printed up in the voluminous tax code and the IRS's interpretations of that tax code as well as all the rulings made by in the past by the tax court. Smarter minds than you or I have already ruled how land may be treated on a farmer's 1040 Schedule F and if you will take the time to read the Schedule F instructions you will probably find their explanation as to Of course. However remember that your farm may decrease it's tax liability by paying rent to the L.L.C. that owns YOUR ranch and your ranch L.L.C. will have to pay taxes on that "income". Then IF you want the money back(and for tax purposes the money had better be physcially present in the L.L.C.s account), the ranch L.L.C. will have to pay it to you in the form of salary or dividends. Then you will have to pay personal income taxes on that salary or dividends. [/QUOTE]
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