Farmer - no income

[Gretel]

I normally do only simple farm returns and was wondering about the following scenario. Farmer (is growing wheat since decades) did not sell his wheat last year due to low prices but put all his harvest in his storage and will sell in 2011.

Only income is a small amount from the government. He is on cash basis. Can I still take all the expenses?

It appears that wheat does not to be counted as inventory. Is that right?

[ChEAr$]

I normally do only simple farm returns and was wondering about the following scenario. Farmer (is growing wheat since decades) did not sell his wheat last year due to low prices but put all his harvest in his storage and will sell in 2011.

Only income is a small amount from the government. He is on cash basis. Can I still take all the expenses?

It appears that wheat does not to be counted as inventory. Is that right?

Einmal ein Bauer; immer ein Bauer!

IOW, he's still in the farming business and still has expenses, so deduct away.

[veritas]

yuk yuk

Einmal ein Bauer; immer ein Bauer!

IOW, he's still in the farming business and still has expenses, so deduct away.

Hope (and the tax code) sustains the farmer.

[Edsel]

Cash Basis

Immune a Redneck!! Immune a Redneck!!

Sometimes farmers will hold back their cattle or other products because of bad prices. Economic decision. Govt is the party that insists on cash basis reporting.

And even THAT is not entirely true. Farmers have the option of accrual based reporting for their revenue, but I don't know that they can make a change after years of reporting on cash basis.

I have on a few occasions reported zero revenue for a farmer, with a full contingent of expenses.

[Gretel]

Thanks you guys, for the support. Danke, Harlan.