Hobby Farm tax filing.

[OneFineAcre]

There was a thread on here a while back about the accounting issues involved with running your farm as a business. The posters spouse is an accountant.

It was a very good read, maybe you can find it.

 

[dianneS]

I hear different time periods for reporting your losses / gains... seven years is the max a farm can lose money or else it is considered a Hobby not a Business. ????

You are probably right. I'd be willing to bet that the time period is longer for farms. My accountant probably only knew the "home based business" number of years off the top of her head. I think she may have said that its longer for farms to operate at a loss, she just didn't know exactly what the length of time was.

 

[goodhors]

I hear different time periods for reporting your losses / gains... seven years is the max a farm can lose money or else it is considered a Hobby not a Business. ????

You are probably right. I'd be willing to bet that the time period is longer for farms. My accountant probably only knew the "home based business" number of years off the top of her head. I think she may have said that its longer for farms to operate at a loss, she just didn't know exactly what the length of time was.

This is why you NEED an accountant that specializes in Farm Accounting or Small Business Accounting, knows the laws and various things that will affect you.
The IRS has NO SENSE of humor if you try telling them "There was a mistake on line 35....." and try to straighten things out. Penalties are not fun, and I hear
getting refunds is about impossible when mistakes are made.