Ag-Visors

Under the IRS hobby loss rule if you have losses in connection with any farming activity, whether livestock, horses or crops, the IRS may suspect that the activity is engaged in as a hobby rather than a business, particularly if there is a history of losses.

Well, we are into the late fall and everyone is getting ready for winter. Some people are thinking about next spring's calf crop and wanting to know what to do to ensure the health of the calves. We have two major problems with disease, one hits the cow before the calf is born and the other hits the calf early in its life.

The Tax Court has recognized that horse racing or breeding is a highly speculative venture, but that “an opportunity to earn a substantial ultimate profit in a highly speculative venture is ordinarily sufficient to indicate that the activity is engaged in for profit even though losses or only occasional small profits are actually generated.”