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.
"Communism only works in Heaven, where they don't need it, and in Hell, where they already have it" Ronald Reagan
You handle them like race horses, but most of those people have a bunch.
"We give dogs time we can spare, space we can spare and love we can spare. And in return, dogs give us their all. It's the best deal man has ever made." M.Facklam
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.
Last edited by luvmylabs23139; 09-16-2009 at 12:25 PM. Reason: add amended returns
cave canem...beware of the dog
Richard Halstead (halst001 at yahoo.com)
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.
Last edited by Hank; 09-16-2009 at 04:29 PM.
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?
Democracy is two wolves and a lamb voting on what to have for lunch. Liberty is a well-armed lamb contesting the vote!----Benjamin Franklin
Don't play with fire with the IRS