Equine Tax Law

Unrealized Appreciation Farmland Value

Print
PDF

Appreciation in value of a taxpayer’s farm or ranch property is often a significant issue in the context of the hobby loss rule.  Although a “reasonable” expectation of profit is not required, the profit objective must be bona fide.  It is the expectation of gain, and not the gain itself, which matters. .

Read more...

IRS Commissioner

Print
PDF

Wouldn’t it be nice if the horse industry had an advocate in the White House?  Ann Romney, horsewoman, could be just such an advocate as First Lady.  Her horse competed in the Olympic event of dressage, and she has long been an advocate for the use of horses for physical therapy. .

Read more...

Retired Taxpayers Lose Tax Court Case

Print
PDF

The Tax Court held that a married couple who engaged in a cattle and horse breeding activity were not engaged in a business, despite the full-time nature of the venture. The case was Garbini v. Commissioner IRS [T.C. Summary Opinion 2004-7]. Mr. Garbini, of Myrtle Creek, Oregon, listed his occupation as a rancher, and his wife indicated she was a housewife. Both taxpayers were retired during the two taxable years in issue, and for Mr. Garbini this was a full time venture. They had a net loss of $127,341 in one year, and $124,584 for a second year at issue. .

Read more...

Tax Deductions for Advertising and Promotional Expenses

Print
PDF

In the horse industry, as in other sports such as car racing and Olympics sports, people will pay to have their business name advertised in connection with certain events.  For example, people will establish a new “classic” event, or “cup” to be an annual sporting event for a given sport.  There are many horse show events and races that are “funded” by business, individuals or companies that use this venue as a form of advertising.

.

Read more...

Treating Two Activities as One for Tax Purposes

Print
PDF

Sometimes a farm, livestock or horse activity may be closely connected to one’s principal occupation, with certain tax advantages.  If two activities are treated as one, deductions and income from each activity can be aggregated in deciding whether the taxpayer has the requisite profit motive under the IRS hobby loss rule.  This is extremely helpful for many people involved in farming, ranching and horse activities. .

Read more...

Share This Page!

Join Our Email List

Email: