Message Font: Serif | Sans-Serif
No. of Recommendations: 3
My inclination is that the price I get for a foal every other year shouldn't be reported as income since the horses are a hobby, I will not make a profit at this, and I am not deducting all the horse costs (feed, vet, etc.)

I suggest referring to IRS Pub 225, Farmer's Tax Guide:

- "Not for Profit Farming", on pages 27 to 28
- Table 7-1, Farm Property Recovery Periods, on page 46
- "Livestock", on page 58
- Table 9-1, Where To First Report Certain Items on Form 4797, page 62
- "Section 1231 Gains and Losses", page 62 to 63

I don't think Pub 225 tells the whole story. Based on anecdotal information, I believe that equestrian livestock businesses are special cases. According to my information, you can lose money on these businesses forever. Regretfully I don't have an authoritative reference for this information. If you live in a farming community, I would suggest seeking the advice of a CPA offering services to the farmers in the area.

David Jacobs

Print the post  


In accordance with IRS Circular 230, you cannot use the contents of any post on The Motley Fool's message boards to avoid tax-related penalties under the Internal Revenue Code or applicable state or local tax law provisions.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.