Seeking a Tax Tip, Schedule F Farming, Purchase of Livestock Hay Trailer

[TexasRancher]

I've been doing the "Cash and Accrual Method" and I do not take any "Depreciation of Equipment" as i'm a small operation.
Was wondering if I can take an Farm Expense Deduction for the one-time purchase of a "livestock hay trailer" in 2023? and when I sell said trailer in 2035 to become farm income? ...can you do this?.....and where do you input those numbers...for Farm Expenses purchase or Farm Income? I don't really want to take depreciation on a $3,500. trailer. Is a trailer like a tractor, can only be depreciated?

 

[Caustic Burno]

I have one timed them and depreciated as well.
That's why I have a CPA to get me every legal penny.

 

[1982vett]

I've been doing the "Cash and Accrual Method" and I do not take any "Depreciation of Equipment" as i'm a small operation.
Was wondering if I can take an Farm Expense Deduction for the one-time purchase of a "livestock hay trailer" in 2023? and when I sell said trailer in 2035 to become farm income? ...can you do this?.....and where do you input those numbers...for Farm Expenses purchase or Farm Income? I don't really want to take depreciation on a $3,500. trailer. Is a trailer like a tractor, can only be depreciated?

To clarify, their is no "cash and accrual method". Its cash or accrual. You have to use one or the other. And to clarify even more, I'm not offering professional opinion here. It is free and worth whatever a free opinion is worth....

Basically for the cash method, for things that should be depreciated such as your trailer, you can expense some or all using the Section 179 expense option. However, it has limits. Ya have to have profits to offset the expenses you are trying to take otherwise you can only depreciate.

As Caustic recommended, find a CPA to help you or at least check your work. If you don't get a CPA involved you should at least get a tax software program such as TurboTax or TaxAct to guide you. I think H&R Block also has one.

 

[1982vett]

Oh, by the way, later when/if you sell it you would report it on Form 4797 Sale of Business Property. That essentially flows through Schedule D where it sorts out the capital gain/loss and then sends the appropriate amount to your Form 1040 Line 7 and the appropriate amount to Line 8.

Easy Peasy....

 

[M.Magis]

A CPA knowledgable in farming operations can more than pay for themselves. They know how to get the biggest return possible.

 

[TexasRancher]

Oh, by the way, later when/if you sell it you would report it on Form 4797 Sale of Business Property. That essentially flows through Schedule D where it sorts out the capital gain/loss and then sends the appropriate amount to your Form 1040 Line 7 and the appropriate amount to Line 8.

Easy Peasy....

That's a good form 4797 to re-review thanks 82vet. Yeah sorry for that...it's "cash method" i'm using. Section 179 expense options will be good to look at....if i have enough profits to take. I've been doing my taxes since i was 16 and for my father late estate...I DO NOT like CPA's. Total disenchantment with them. I've always been good at reading and figuring out what the forms are doing. I trust myself to get everything I'm owed back...not some 3rd party.
The two times I went for help to two different CPAs. They basically made me fill out all the forms with ALL THE INFORMATION AND NUMBERS...if I'm going to sit in their office for 5 hours on a desk full of paperwork and a calculator (doing all their work for them)....it didn't take me long to figure out i was basically filling out all the neccesary forms with real numbers.... the entire 1040, with needed schedules. The forms they used tried to MASK the FACT that your numbers woudl just be inputted into the real forms. My older brother with a N.Y. engineering business confirmed what they do too, you end up doing all the work yourself. What fun is that? You can't just bring the CPA the organized receipts for sales, expenses and profits-gains with all the information...and your old tax returns to grab brokerage numbers from...and walk away. No, you end up doing all the work in a little cubby hole yourself with your own calculator...filling out forms whereby they just plug and play and get paid afterwards. I'm calling capola on that.
Granted the two CPAs i went to might have been clueless, scammy, bad ones...that didn't know how to handle brokerage accounts or businesses. It was a very cold ugly place, sitting me alone to do my own taxes myself...never will I do all the work and hand feed them the end result numbers so I can pay them $500. to $1,000.
82Vet...you've helped me out a lot with those two pointers...just what i needed. I had read 4797 few years back....good one to start adding into my yearly tax returns. Sorry for my rant on CPAs, might just be my area i live in. I actual enjoy doing my taxes myself (no turbo-tax-pro or any other tax program), I trust myself more.

 

[Texas G@l]

I have one timed them and depreciated as well.
That's why I have a CPA to get me every legal penny.

Same. A CPA is well worth the money you pay them.

 

[M.Magis]

That's a good form 4797 to re-review thanks 82vet. Yeah sorry for that...it's "cash method" i'm using. Section 179 expense options will be good to look at....if i have enough profits to take. I've been doing my taxes since i was 16 and for my father late estate...I DO NOT like CPA's. Total disenchantment with them. I've always been good at reading and figuring out what the forms are doing. I trust myself to get everything I'm owed back...not some 3rd party.
The two times I went for help to two different CPAs. They basically made me fill out all the forms with ALL THE INFORMATION AND NUMBERS...if I'm going to sit in their office for 5 hours on a desk full of paperwork and a calculator (doing all their work for them)....it didn't take me long to figure out i was basically filling out all the neccesary forms with real numbers.... the entire 1040, with needed schedules. The forms they used tried to MASK the FACT that your numbers woudl just be inputted into the real forms. My older brother with a N.Y. engineering business confirmed what they do too, you end up doing all the work yourself. What fun is that? You can't just bring the CPA the organized receipts for sales, expenses and profits-gains with all the information...and your old tax returns to grab brokerage numbers from...and walk away. No, you end up doing all the work in a little cubby hole yourself with your own calculator...filling out forms whereby they just plug and play and get paid afterwards. I'm calling capola on that.
Granted the two CPAs i went to might have been clueless, scammy, bad ones...that didn't know how to handle brokerage accounts or businesses. It was a very cold ugly place, sitting me alone to do my own taxes myself...never will I do all the work and hand feed them the end result numbers so I can pay them $500. to $1,000.
82Vet...you've helped me out a lot with those two pointers...just what i needed. I had read 4797 few years back....good one to start adding into my yearly tax returns. Sorry for my rant on CPAs, might just be my area i live in. I actual enjoy doing my taxes myself (no turbo-tax-pro or any other tax program), I trust myself more.

Thats why we said a GOOD CPA. If I want to take mine a box of receipts and leave, I can. She says thats what most people do. And I've never spent more than $200. If what you explained were your experiences, you apparently haven't found a good one yet. They will make your life far easier and I promise they know every little trick there is.

 

[TexasRancher]

Thats why we said a GOOD CPA. If I want to take mine a box of receipts and leave, I can. She says thats what most people do. And I've never spent more than $200. If what you explained were your experiences, you apparently haven't found a good one yet. They will make your life far easier and I promise they know every little trick there is.

Good to know there's hope out there...i just had cold alone experiences (never got to speak to anyone, but a secretary pushing papers onto me to fill out) from the the big block tax consultants and one small CPA firm.

 

[jltrent]

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