Ag-Visors

Section 183 of the IRS Code pertains to activities “not engaged in for profit.” This provision is used to disallow deductions for horse owners and all other farming-ranching activities as well as other ventures ranging from multi-level marketing to air charters. How this provision is applied and interpreted is something that the IRS Commissioner can and does influence.

Section 183 of the IRS Code pertains to activities “not engaged in for profit.” This provision is used to disallow deductions for horse owners and all other farming-ranching activities as well as other ventures ranging from multi-level marketing to air charters. How this provision is applied and interpreted is something that the IRS Commissioner can and does influence.

Another common affliction of animals this time of the year is mastitis. This is an infection of the mammary glands.

Many horse owners don’t realize the importance of Factor No. 4 of the IRS Regulations.  This Factor is called “Expectation That Assets Will Appreciate in Value,” and has taken on greater significance than formerly, particularly in situations where the taxpayer has been unable to show any profit years. Evidence that assets used in connection with the horse activity have appreciated in value can be used to dispel any notion that the enterprise is not in fact operated as a business.

I have had several lameness cases in horses lately. Most of them have been from improper trimming and shoeing. Several years ago we were having trouble getting them stood up because everyone was cutting heals to short. This led to the horse not having enough support for the tendons and boney column of their leg.

In all walks of life, a concern exists: the possibility of being prosecuted for tax evasion. Under Section 7201 of the Internal Revenue Code, it is a federal crime for anyone to willfully attempt to evade or defeat the payment of federal income taxes. By “attempt” the statute means that the individual knew or should have known that he had taxable income, which he was required by law to report during the tax years involved, but failed to report the income.

For people in the farming and livestock industries the main worry in an IRS audit is the hobby loss rule and whether certain farm losses will be allowed as tax deductions. For some people, however, in all walks of life, a greater concern exists: the possibility of being prosecuted for tax evasion. Under Section 7201 of the Internal Revenue Code, it is a federal crime for anyone to willfully attempt to evade or defeat the payment of federal income taxes. By “attempt” the statute means that the individual knew or should have known that he had taxable income, which he was required by law to report during the tax years involved, but failed to report the income.

In the last few weeks we have seen an outbreak of Parvovirus in dogs. For those of you who are not familiar with this disease, it causes vomiting and diarrhea in your puppy. It will also suppress the immune system of the dog. This means it acts like HIV or AIDS. We normally vaccinate all dogs for this disease. But, some people think that one dose is enough. And it is not.

Ectoparasites are upon us and what are we going to do? These are those pesky fleas, ticks and flies. Let alone the mosquitoes, wasps, spiders and ants.

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, Ore., 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.