Death Of Cows

[SueBaby]

Clients cattle died due to hurricane; they were worth over 20K. He wants me to write that off his farm------can I? If I do he will have over $50,000 in loss. Does that sound right or not?

I just have a funny feeling about this one--why-- don't know guess I am tired and can't think. So what does anyone think of this to help out?

[BOB W]

What about a written appraisal????? ,, So you feel more comfortable...............

[WhiteOleander]

If he purchased the animals, then he probably already wrote them off the year he bought them.

If they are animals he raised, he has written of the feed, etc it took to take care of them.

So, either way, he doesn't have a basis to write off. He hasn't lost anything.

[SueBaby]

If he purchased the animals, then he probably already wrote them off the year he bought them.

If they are animals he raised, he has written of the feed, etc it took to take care of them.

So, either way, he doesn't have a basis to write off. He hasn't lost anything.

That is what I told him but he is 'kinda' loud spoken and pushy about putting 'stuff'' on his farm (that HE wants).
He even got mad because I went up $25 on his bill. He made over $185,000 agi getting back over $12,000 as a refund and for 5 years has not went up on him at all. only $275 and anywhere else it would be lots higher but he still complains. People like him I can not get rid of. Why????

[WhiteOleander]

Stick to your guns. This issue isn't a gray area. It is not something he can do. If he doesn't like it, he will go away. Problem solved.

In this economic atmosphere, it can be hard to lose revenue, even from someone you don't particularly like. But, sometimes you have to draw the line.

[Jesse]

I'm not a farm expert, but is it possible the cows were not written off because they were inventory? Or depreciable?

[taxmom34]

agree with Jesse

i'm not farm expert either, but if these cows were depreciated, couldn't he sell them on 4797 or do they have to be on schedule F? i haven't looked at schedule F in years. or casualty loss?

[thomtax]

To me, I don't see how being killed by hurricane can be anything but casualty loss. On this form it asks for the market value before casualty (let's say $50,000); market value after loss (let's say 0); and cost basis. Then you get the cost basis if it is lower than the market value.

If they were breeding stock on depr. schedule, the loss is the remaining value on schedule. If they were purchased for resale, they would be inventory and the basis would be what was paid for them. If they were raised from birth, there will be no basis as the feed and expenses have been taken as they were spent.

LT

[Bucky]

Raised cows = nothing.
Cows purchased for breeding should be on depreciation schedule so you could sell on 4797 and use zero as sales price and remaining basis for cost.

Cows bought for resale should not have been written off so full purchase price would be deductible. Just depends how you handled cows when they were purchased. If he purchased this year and lost this year just put zero line 1 fo sch F and cost of livestock on line 2.

[jimmcg]

[QUOTE=
He even got mad because I went up $25 on his bill. He made over $185,000 agi getting back over $12,000 as a refund and for 5 years has not went up on him at all. only $275 and anywhere else it would be lots higher but he still complains. People like him I can not get rid of. Why????[/QUOTE]

You cannot get rid of him because you are not communicating assertively enough. If you wish to be socially correct tell him that he would be happier having someone else prepare his tax return. If he cannot comprehend that tell him he is an obnoxius SOB and life is too short to have to put up with people like him.

[DaveO]

Sue Baby, since you have been doing the return for years you already know what the basis of the cattle is. If he is unwilling to have you prepare the return correctly then it's time for him to go. There is only one set of rules for return preparation, not with standing Obama cabinet nominees, and those rules belong to the IRS they are not yours to bend.

I understand your frustration as I've had loud aggressive people in my office attempting to tell me how their return will be prepared. I'm unwilling to sacrifice my career to save them some taxes and it's unethical of them to expect me too. If they can’t understand that send them down the road. You’ll sleep better I guarantee it.