Keep me from barking up the wrong tree

[MAMalody]

I have a client that started a dog breeding business during 2008. I must admit, this is a new one on me. Can anybody direct me to an information source?

[Uncle Sam]

Barking Up the Wrong Tree

I suggest you check out the hobby loss rules.

[solomon]

One case you can read is Ralph Whitecavage TC Memo 2008-23.

[erchess]

While I feel that both of the earlier suggestions are valid I would also advise you to keep in mind that dog breeding operations do sometimes make a profit. I would bet you anything that the Internal Revenue Manual has a chapter on Dog Breeding and while it's not the final word it does tell you the enemy's ideas about what are typical items of income and expense for this business and what kinds of records they tell auditors to demand before allowing an expense or agreeing that income was only what your client says it was.

There may also be an IRS Pub on animal breeding operations.

Your client may belong to one or more professional associations that exist at least in part to support him by enlightening you.

I have a high regard for you as a tax professional and I feel sure that with the suggestions from this board you will be able to provide exemplary service to this client if his goal is to pay all the tax the Federal and State Authorities have decided that he owes but no more.

[MAMalody]

I will follow up on each of the suggestions. At this time, it does appear to be a business, however, I have not pursued the hobby angle to conclusion yet. Fortunately, there is not attempt at subterfuge with this client and I don't have to fight that. They just want the best tax benefit available to them for what they are doing. Any more input, please feel free to leave it.

[Zee]

Tax Almanac has some strings

Tax Almanac has had quite a few discussions on dog breeding, here's a link to one of them:

http://www.taxalmanac.org/index.php/Discussion:Dog_breeding_depreication

You might try an internet search using dog breeders taxation to find other discussions.

[Kram BergGold]

depreciation

Be sure to check out the special rules on depreciating the dogs.

[Black Bart]

Be sure to check out the special rules on depreciating the dogs.

Where ARE the special rules? I haven't been able to find anything except cows and horses.

[Zee]

Where ARE the special rules? I haven't been able to find anything except cows and horses.

Don't know either, according to the CCH guide (link below) dogs don't have a class life and 7-years should be used.

http://books.google.com/books?id=--pLHsdfhEoC&pg=PA123&lpg=PA123&dq=depreciating+breeding+dogs&source=web&ots=ZpPpLnGBjD&sig=diy9mP3LLUmb0w8Rioo7p53a77c&hl=en&sa=X&oi=book_result&resnum=9&ct=result

[Gary]

Also note

that dog breeding, if not a hobby, is Schedule C, not schedule F.