My husband and I have well started a small equine breeding farm, through popular demand for the blood lines that we have.
Here is my question I have tons of receipts for feed, fencing, and misc supplies.
This business has not had a profit this year because it takes 11-12 months to produce a foal. We have five beatuiful mares, two geldings and a welsh pony. Our mares are due to foal in April. How will this effect my taxes and is this really classified as a farm since we do not own a large amount of animals?



Thanks
Patricia

Patricia:

You can run it as a farm (Schdule F) or as a business (Schedule C). I believe the FARM option to be best as the IRS recognizes that farms can have multiple years of little or no income due to circumstances beyond the control of the owners. They are LESS forgiving for Schedule C businesses.

Thanks so much for the tip and now I have a direction to take because that was going to be my next question business or farm thanks so much again

Glad to help!