Did Taxes Saturday,Declared Farm,got 3800.00 back!!!!

[Katy]

Quote:
I was not referencing the 1/3 acre as much as I was the number of birds. A farm should be determined by the income that it generates...not by the amount of ground it contains. Altho honestly in my book neither 1/3 of an acre or 5.42 acres is a farm. I can't imagine with the number of birds she has that $3800 was even spent on their upkeep for a year, but it allowed her that much more money for a refund? Something about that just doesn't smell right to me and seems like the kind of thing that sends up a red flag to the IRS.

 

[Katy]

Quote:
I'm hardly mad.....you're the one who's gonna have to explain it to the IRS....not me.

 

[gmendoza]

Quote:
I was not referencing the 1/3 acre as much as I was the number of birds. A farm should be determined by the income that it generates...not by the amount of ground it contains. Altho honestly in my book neither 1/3 of an acre or 5.42 acres is a farm. I can't imagine with the number of birds she has that $3800 was even spent on their upkeep for a year, but it allowed her that much more money for a refund? Something about that just doesn't smell right to me and seems like the kind of thing that sends up a red flag to the IRS.

I also delcared that I make chicken coops,and runs.That was the majority of money.We declared farm of: Poultry and poultry ITEMS.

 

[mchl]

Im happy for ya..some people on here are the most rude abnoxious spitefull and so on, but dont let it bother you ,although they do know it all

 

[domino7]

Hey, more power to you. Our food stamp recieving neighbors got back over $7000. I don't understand it. The wife worked part time for two months at Walmart. I can see not paying income taxes if you're poor, but this makes no sense to me. I just imagine how many of those people there are.

Good luck with your small farm.

 

[Katy]

Quote:

Name calling will get you far in life.

 

[Show Me Chick]

Why would you get money back if your making a profit? I would think you would be paying in? Maybe I'm wrong but it sounds like your getting money back for taking a loss because your expenses are more than your profit.

 

[Buck Creek Chickens]

Quote:
X2

 

[Spookwriter]

Not a CPA, but a quick search tells me that the SIZE of the farm is not issue
as much as it is the INTENT of the farm. If I had a doubt, I would ask my CPA
whom I would have choosen because of his expertise in farm matters.

I use the CPA I use because of his experience in matters pertaining to my field.




From the current IRS tax code, on farms

TITLE 26--INTERNAL REVENUE

CHAPTER I--INTERNAL REVENUE SERVICE,
DEPARTMENT OF THE TREASURY
(Continued)

PART 1--INCOME TAXES--Table of Contents

Sec. 1.175-3 Definition of ``the business of farming.''

The method described in section 175 is available only to a taxpayer
engaged in ``the business of farming''. A taxpayer is engaged in the
business of farming if he cultivates, operates, or manages a farm for
gain or profit, either as owner or tenant. For the purpose of section
175, a taxpayer who receives a rental (either in cash or in kind) which
is based upon farm production is engaged in the business of farming.
However, a taxpayer who receives a fixed rental (without reference to
production) is engaged in the business of farming only if he
participates to a material extent in the operation or management of the
farm. A taxpayer engaged in forestry or the growing of timber is not
thereby engaged in the

[[Page 205]]

business of farming. A person cultivating or operating a farm for
recreation or pleasure rather than a profit is not engaged in the
business of farming. For the purpose of this section, the term farm is
used in its ordinary, accepted sense and includes stock, dairy, poultry,
fish, fruit, and truck farms, and also plantations, ranches, ranges, and
orchards. A fish farm is an area where fish are grown or raised, as
opposed to merely caught or harvested; that is, an area where they are
artificially fed, protected, cared for, etc. A taxpayer is engaged in
``the business of farming'' if he is a member of a partnership engaged
in the business of farming. See paragraphs (a)(8)(i) and (c)(1)(iv) of
Sec. 1.702-1.

.................................


Sec. 1.175-4 Definition of ``land used in farming.''

(a) Requirements. For purposes of section 175, the term land used in
farming means land which is used in the business of farming and which
meets both of the following requirements:
(1) The land must be used for the production of crops, fruits, or
other agricultural products, including fish, or for the sustenance of
livestock. The term livestock includes cattle, hogs, horses, mules,
donkeys, sheep, goats, captive fur-bearing animals, chickens, turkeys,
pigeons, and other poultry. Land used for the sustenance of livestock
includes land used for grazing such livestock.
(2) The land must be or have been so used either by the taxpayer or
his tenant at some time before or at the same time as, the taxpayer
makes the expenditures for soil or water conservation or for the
prevention of the erosion of land. The taxpayer will be considered to
have used the land in farming before making such expenditure if he or
his tenant has employed the land in a farming use in the past. If the
expenditures are made by the taxpayer in respect of land newly acquired
from one who immediately prior to the acquisition was using it in
farming, the taxpayer will be considered to be using the land in farming
at the time that such expenditures are made, if the use which is made by
the taxpayer of the land from the time of its acquisition by him is
substantially a continuation of its use in farming, whether for the same
farming use as that of the taxpayer's predecessor or for one of the
other uses specified in paragraph (a)(1) of this section.
(b) Examples. The provisions of paragraph (a) of this section may be
illustrated by the following examples:

Example 1. A purchases an operating farm from B in the autumn after
B has harvested his crops. Prior to spring plowing and planting when the
land is idle because of the season, A makes certain soil and water
conservation expenditures on this farm. At the time such expenditures
are made the land is considered to be used by A in farming, and A may
deduct such expenditures under section 175, subject to the other
requisite conditions of such section.
Example 2. C acquires uncultivated land, not previously used in
farming, which he intends to develop for farming. Prior to putting this
land into production it is necessary for C to clear brush, construct
earthen terraces and ponds, and make other soil and water conservation
expenditures. The land is not used in farming at the same time that such
expenditures are made. Therefore, C may not deduct such expenditures
under section 175.
Example 3. D acquires several tracts of land from persons who had
used such land immediately prior to D's acquisition for grazing cattle.
D intends to use the land for growing grapes. In order to make the land
suitable for this use, D constructs earthen terraces, builds drainage
ditches and irrigation ditches, extensively treats the soil, and makes
other soil and water conservation expenditures. The land is considered
to be used in farming by D at the time he makes such expenditures, even
though it is being prepared for a different type of farming activity
than that engaged in by D's predecessors. Therefore, D may deduct such
expenditures under section 175, subject to the other requisite
conditions of such section.

(c) Cross reference. For rules relating to the allocation of
expenditures that benefit both land used in farming and other land of
the taxpayer, see Sec. 1.175-7.

 

[halo]

I have claimed farm expenses for the last 25 years, and have always used a very good accountant. The IRS will not consider cancelled checks as receipts, so you need to keep receipts for everything you want to claim as expenses. A ledger is fine, but not essential. I put everything in Quickbooks, to track my expenses and income.