Which Sch F,C or E?
I have a client that has bought several hundred acres and will is starting to stock it for big deer type hunting. In the meantime, he is buying and raising prime does and bucks and intalling stands and so forth. And he has built a small ranch house on part of this property. He has made a major investment in this property and improvements.This ranch will mostly be used by hunters who will pay several thousands of dollars to hunt on it. So far there is no income just improvements to the property. My question is, in the meantime, do I file it as a farm since he is buying and breeding, and since it may take a while to establish, farming losses for a few years may not raise a red flag as easily. Or as sch c with no income ,big capitlization cost and losses,but there will only be customers there occasionally, or a schdule E because he is leasing out the right to hunt on his property. Or do I file it as farm rental income? This one kind of has me stumped. What would you suggest and so why?I was thinking that I would file it as a farm and then when it started producing real income switch it over to Sch C. I've researched this on the IRS website and can't get a firm grip on it. Has anyone else had a client like this?
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