TAX BREAK FOR CATTLE

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RICHARDL

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Ok, this will have been my first year owning cattle, so my question is And i guess this would be a question for the folks in louisiana, Is there a place on the tax form for owning cattle. a break, deduction? anything. seems like someone once told me that if you have a minimun of 5 head you get some kind of deduction. ? Seems like i've remember something on there when i did it last year. :cowboy:
 

Brandonm22

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I have never prepared any Louisiana state returns so anything is possible. What they probably were referring to was not on the state return but rather on your property taxes. Alabama has a current use clause where if you are growing pine trees, raising goats, etc you pay the same taxes as any other farm even if the property is worth $100g an acre. Texas has a much harder to get ag exemption where you have to show that you are making an effort to run a profitable farm and they reduce your taxes. Florida also has an ag. exemption. You have to go down to your county tax assessor's office and claim the exemption. And of course if you lose money in the ranching business you can claim a farm LOSS on your Schedule F (must file a schedule F (F for farm)). Your 1040 will have a line for your Farm Loss or Profit and that is used to calculate your taxable income.
 

grannysoo

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Busterz":2fbaf27w said:
Breeding livestock can be depreciated.

True.

However, in GA, we can depreciate the females, but we can't depreciate the bulls.

Must be that they are having too much fun to get a tax break.......... :nod:
 

Sasserosa

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We can put our land in conservation in the county I am in in GA. It ties it up for 10 years but reduces your taxes. In my case around $5,000.00 per year. I'm close (50 miles) to Atlanta and land was expensive a few months ago before the bottom fell out. Don't know what its worth now.
 

kenny thomas

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Most anything you spend also can be used on the schedule F. Feed, fuel, fencing, ect. As said you might have to prove that you are trying to make a profit and it is not just a hobby.
 

presmudjo

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Osceola county in Florida gave me a great in depth description if I wanted to do the county tax deduction. It sounded better to me to stay away. If after 5 years you don't show a profit on Fed taxes, they take away the exemption and then start your value all over again at current values. You lose all the save your home, etc. Now if my 5 years were up in 2006 or 07, I would have been so very screwed. In my case we bought before the boom and at a super great price. Who wanted to live in the swamp? WE Did!! Go figure. Now they value the land at what we payed for the who shabang years ago! And that is with the current sales going on. When prices were higher than you could imagine, people were saying why don't you sell? And where would we go? We still have to work and all the other prices where the same. I would just research, research, research. Phone calls locally are cheap, just time consuming. Better than finding out the hard way. Good luck in your search.
 

Brandonm22

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presmudjo":i1yshwd2 said:
Osceola county in Florida gave me a great in depth description if I wanted to do the county tax deduction. It sounded better to me to stay away. If after 5 years you don't show a profit on Fed taxes, they take away the exemption and then start your value all over again at current values.

That is why you need to know what you are doing when you fill out your taxes. Just because you lost money does NOT mean you have to report a loss to the government. IF you are risking being declared a hobby farm (and facing severe tax penalties), declare a $50 profit on your 1040 F two out of 5 years (even if that isn't true).
 

presmudjo

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Been in trouble with IRS in past with just a regular job. Gives you a scare. If we do more than we are now then will look into creative bookeeping for sure. As it is, our local taxes aren't that bad compared to what majority pay, but then again, we didn't play into the gotta buy at crazy price scheme either. Gee, what's the guys name that has been ripping people off for years and years? What was it 50 Billion? Now he had some very creative bookkeeping going on didn't he. He scammed the elite of elite for years.
 

HerefordSire

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RICHARDL":2uxsca6e said:
Ok, this will have been my first year owning cattle, so my question is And i guess this would be a question for the folks in louisiana, Is there a place on the tax form for owning cattle. a break, deduction? anything. seems like someone once told me that if you have a minimun of 5 head you get some kind of deduction. ? Seems like i've remember something on there when i did it last year. :cowboy:

Are you working full time outside of the farm?
 

cypressfarms

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RICHARDL":1ypqrcv9 said:
Ok, this will have been my first year owning cattle, so my question is And i guess this would be a question for the folks in louisiana, Is there a place on the tax form for owning cattle. a break, deduction? anything. seems like someone once told me that if you have a minimun of 5 head you get some kind of deduction. ? Seems like i've remember something on there when i did it last year. :cowboy:

For profit farm, or be able to show you are trying - you can depreciate the purchase price of cows and bulls and any other assets bought for the farm. Claiming the green 4 wheeler for the farm won't work. One thing you can do, however, is change the time you depreciate purchased cattle. Some years back H & R used to do my taxes, and they always depreciated purchased cows over 7 years, bulls over 5. I now have a "private" accountant and the cows are depreciated over 5 years, bulls over 3. Helps you realize some of the benefit sooner - without breaking any laws.

However, there is no silver bullet to check off giving you loads of money just because your a farmer. Maybe Obama will give cattle farmers a trillion dollar stimulus, if he did that I could hire 5 new employees and reduce the unemployment rate. ;-)
 

MShaffer

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You should also read about the IRS Section 179 writeoff. In some cases, you can writeoff an asset in one year instead of taking the depreciation deduction over many years.
 

Brandonm22

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Sorry I accidentally posted the same thing about 5 times and only one would delete.
 

Brandonm22

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cypressfarms":3uqh7zno said:
Claiming the green 4 wheeler for the farm won't work.

Who told you that??? IF you use the ATV to check the cows, ride the fences, herd up the cows, refill the mineral feeders, feed, collect eggs, pull calves (as something to jack against NOT moving), yes you can certainly depreciate it like a tractor or a purchased horse (if the horse were used similarly). The danger (like declaring a loss every year or mammoth losses) is that (according to some people) it is a red flag that makes it more likely the IRS will come visit you. It would certainly help if in your records you kept photographic evidence of how the vehicle is used and in a perfect record keeping world you kept a daily log of hours used and for what purpose. Now if the thing is half personal use (riding the roads, racing, hunting trips, camping outings, etc) only deduct the 50% of it that is used for the farm.

http://www.agriculture.com/ag/story.jht ... 685884.xml
 
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RICHARDL

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yes, i work full time. And i have been claiming stuff like tractor repairs, chemicals, fuel, partial truck use. Stuff like that. I'm not trying to get back a whole heck of alot. but i'd rather not have to pay. I'm single or filing single and i get raped every check for 35% of my check. So having cattle was one of the reasons. And i use my atv daily to check on things, spray fence lines, work on fence lines. i keep every receipt form john deere & the feeds stores. and i add them up and get my total and usually go less than 50%. I'm just not sure about all these expenses with no profit. what are most doing with expenses ? i guess i have to show a profit every now & again even if i don't???? i'm just not sure :cowboy:
 

HerefordSire

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RICHARDL":2kvfvo46 said:
yes, i work full time. And i have been claiming stuff like tractor repairs, chemicals, fuel, partial truck use. Stuff like that. I'm not trying to get back a whole heck of alot. but i'd rather not have to pay. I'm single or filing single and i get raped every check for 35% of my check. So having cattle was one of the reasons. And i use my atv daily to check on things, spray fence lines, work on fence lines. i keep every receipt form john deere & the feeds stores. and i add them up and get my total and usually go less than 50%. I'm just not sure about all these expenses with no profit. what are most doing with expenses ? i guess i have to show a profit every now & again even if i don't???? i'm just not sure :cowboy:

Do not hesitate to try to get all the taxes you paid in, as the result of your off farm job, back in the form of a non-interest bearing refund (they (we) are making money off of your money without having to pay you interest). Anything you shell out for generating income for your farm can be deducted against all income produced by the farm, if any. Watch for 5 years in a row of showing losses (red flag?). This amount is then consolidated in the 1040 from and deducted from your job income. In the initial years, the idea is to have enough expenses to receive 100% of your paid in taxes from your job. This increases cash flow. However, always be honest, and NEVER attempt to deduct any expense you are not worthy of and NEVER hide any income you produced. What will eventually happen, is the IRS (us) will get half of everything you are worth when you die if over a threshhold amount. Therefore, they (we) are willing to help you get established and make them (us) money.
 
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RICHARDL

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I think that's the problem i'm a little too honest. i keep everything(receipts) in case the irs does come a callin. Last year i figured i was getting to much back, didn't want to raise any flags. so i reduced my expenses by 50% Thanks for the info. will use :cowboy:
 

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