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Tax question - depreciation
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<blockquote data-quote="1982vett" data-source="post: 706408" data-attributes="member: 7795"><p>Again, Not tax advise. </p><p>Tell you CPA to get out Publication 225, Farmers Tax Guide, and read it then read it again. ;-) </p><p> <a href="http://www.irs.gov/pub/irs-pdf/p225.pdf" target="_blank">http://www.irs.gov/pub/irs-pdf/p225.pdf</a></p><p></p><p>Page 26 Losses From Operating a Farming</p><p></p><p></p><p>* he needs to understand "at risk"</p><p>You are at risk in any activity for:</p><p>1. the money and adjusted basis of property you contribute to the activity</p><p></p><p>* he needs to understand "passive activity limits"</p><p>A passive activity is generally any activity involving the conduct of any trade or business in which you do not materially participate.</p><p></p><p>You seem to have no problem making the "at risk" portion of this.</p><p></p><p>Not For Profit Farming</p><p></p><p>In determining whether you are carrying on your farming activity for profit, <strong>all facts are taken into account. No one factor alone is decisive.</strong> Among the facts to consider are whether: (just a few)</p><p> You operate your farm in a businesslike manner.</p><p></p><p> The time and effort you spend on farming indicates you <strong>intend</strong> to make it profitable</p><p></p><p> Your losses are due to circumstances beyond your control <strong>or are normal in the start-up phase of farming</strong>.</p><p></p><p> You or you advisers have the knowledge needed to carry on the farming activity as a successful business.</p><p></p><p> You can expect to make a future profit from the appreciation of the assets used in the farming activity.</p><p></p><p>Once your CPA grasps these concepts you shouldn't have a problem.</p></blockquote><p></p>
[QUOTE="1982vett, post: 706408, member: 7795"] Again, Not tax advise. Tell you CPA to get out Publication 225, Farmers Tax Guide, and read it then read it again. ;-) [url=http://www.irs.gov/pub/irs-pdf/p225.pdf]http://www.irs.gov/pub/irs-pdf/p225.pdf[/url] Page 26 Losses From Operating a Farming * he needs to understand "at risk" You are at risk in any activity for: 1. the money and adjusted basis of property you contribute to the activity * he needs to understand "passive activity limits" A passive activity is generally any activity involving the conduct of any trade or business in which you do not materially participate. You seem to have no problem making the "at risk" portion of this. Not For Profit Farming In determining whether you are carrying on your farming activity for profit, [b]all facts are taken into account. No one factor alone is decisive.[/b] Among the facts to consider are whether: (just a few) You operate your farm in a businesslike manner. The time and effort you spend on farming indicates you [b]intend[/b] to make it profitable Your losses are due to circumstances beyond your control [b]or are normal in the start-up phase of farming[/b]. You or you advisers have the knowledge needed to carry on the farming activity as a successful business. You can expect to make a future profit from the appreciation of the assets used in the farming activity. Once your CPA grasps these concepts you shouldn't have a problem. [/QUOTE]
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