Dog related tax deductions

[TXduckdog]

What about the owners of the really good stud dogs that are bred hundreds of times? Do the owners have to declare the income if it is as you say a hobby or do they have to declare the income because it is making a profit?

Roger....I suppose there is some language in the tax code about this.

We can call Charlie Rangel who wrote most of it and ask and then also ask how we could get by without declaring it...like he did.

[Steve Amrein]

How about prostitution hows that claimed.........


Our friends had big $$ litters and lots of stud fees from time to time and to offset the income they even had to buy a new truck. The had it all set up in the past as some sort of Company or LLC. I would not want to set anything like that up because if I showed the losses on paper like I assume it would work out I would be sick or be in the hospital for what the wife would do to me.

[ErinsEdge]

You handle them like race horses, but most of those people have a bunch.

[luvmylabs23139]

What about the owners of the really good stud dogs that are bred hundreds of times? Do the owners have to declare the income if it is as you say a hobby or do they have to declare the income because it is making a profit?

Technically, the best way would be to set up an LLC prior to having that great stud dog.
Real life best way to handle it, no comment.

If you kept all records for prior years you could actually file ammended returns adding in the business with losses to offset the years of income. That would not have to be an LLC .

Don't forget that if the owner of the stud dog has multiple dogs they can offset the income from the one stud dog with the expenses for all of the dogs.

[Richard Halstead]

What about the owners of the really good stud dogs that are bred hundreds of times? Do the owners have to declare the income if it is as you say a hobby or do they have to declare the income because it is making a profit?

All the profit is reported as well as costs for maintaining the stud dog. You can write off entry fee's, as well as travel expeses. If you write off more than you take in it's no longer a business, but a hobby.

[Hank]

I'm not sure that losing money is what turns a business into a hobby. I believe the IRS is realistic enough to recognize that many many many businesses come into being but end up losing money. I also don't think that whether or not you have a full time job figures in to what constitutes a hobby. You have to remember that the IRS is boxed in because ideally for them, everyone would have a full time job AND a lucrative taxable sideline. Bottom line is that the IRS's mission is to encourage the profit motive, not to discourage it.

[labdoc]

I still question the hobby versus business part as anything can be a hobby yet I can't deduct, say watching football, unless I plan to publish a video on armchair quarterbacking, then it becomes a business. Truthfully the puppy mill is more of a business than the occasional retriever breeder as they are the one's trying to make it profitable.

Let me change my original question a little. If you have 1-2 litters a year, do YOU deduct food, vet, kennels, bumpers, training, etc. and if so has the IRS ever questioned your deductions?

[luvmylabs23139]

Let me change my original question a little. If you have 1-2 litters a year, do YOU deduct food, vet, kennels, bumpers, training, etc. and if so has the IRS ever questioned your deductions?

Claim no income deduct no expenses. Chances are expenses are greater than income. YOu would be able as a hobby breeder to deduct all the food, vet bills, etc associated with any other dogs you own as they are also part of your hobby. The retired 12 yr old snoozing on your couch is part of your hobby.
Don't play with fire with the IRS

[YardleyLabs]

I still question the hobby versus business part as anything can be a hobby yet I can't deduct, say watching football, unless I plan to publish a video on armchair quarterbacking, then it becomes a business. Truthfully the puppy mill is more of a business than the occasional retriever breeder as they are the one's trying to make it profitable.

Let me change my original question a little. If you have 1-2 litters a year, do YOU deduct food, vet, kennels, bumpers, training, etc. and if so has the IRS ever questioned your deductions?

I have deducted expenses related to the maintenance of the dogs I breed, but have not deducted expenses related to training or purchase. I have also reported a profit (albeit a small one) from breeding activities and paid the piper. For my photography, which is similarly at risk of being classified as a hobby, I deduct all variable expenses (travel, supplies, shipping, annual software upgrades), but not the costs of equipment since that would place me in a loss position. I show a small net profit and pay the taxes. I have never been audited on either.