Farmers having any income

[gman]

this year. I have very few farmers showing any profit the last few years. Anyone else preparing farmers returns with continous losses. Will the IRS look closer at these returns???

[DaveO]

Do Farmers ever make any money? No really it's about the same here. Those who sold grain right have had some good profits. Others manage their farms so they never do show a profit.

[Gretel]

I know about a farmer who - years ago - got his gun out when the IRS agent was pestering him. Agent left and was never seen after this.

I think the IRS is very well aware of the difficulty farmers have and the IRS has in trying to deny biz status for a real farmer.

[thomtax]

I have one that has had losses for ten years, since I first started with them. The depreciation alone will cause a loss. They are keeping most of cattle trying to grow the herd, so the sales each year are not large compared with the expenses. Of course, someday, when sold, there will be a big year but they are postponing until income sources from other places stops.

LT

[Jiggers]

Farm losses

The arguing point in an audit is the profit motive. Is there one?

Sure, most of the farmers that I have will show a loss only due to depreciation.

In an audit, you can point out that if the herd was liquidated, and all assets were sold, then there would be a very large profit.

I do argue against showing a loss each year, especially for the younger farmers. No SS benefits accrue and neither does disability that would be available under SS.

I try to at least file the optional method for SE tax because of this.

[JohnH]

Farmer to his friend: "What would you do if you won a million dollars in the lottery?"

Friend: "Oh, I'd probably just keep farming until I lost it all."

[Larmil]

Farmer to his friend: "What would you do if you won a million dollars in the lottery?"

Friend: "Oh, I'd probably just keep farming until I lost it all."

A US Senator was visiting a dairy farm in his state. The farmer explained his operation stating the the cows MUST be milked twice every day. The Senator replied "Really, they have to be milked 10 times a week?"

I know old joke, but I am old.

[JG EA]

And don't forget the appreciation of assets (farm land) is a factor in the farmer's favor.