Boarding Stables

[Sparky]

Anyone out there do a small business for Boarding Horses?
Have been doing it on sch. C. Anyone treat it as farming?
This is an expensive business - never any profit
Skews hobby and have gone over the rules many times with client.
It is treated as a for-profit . .

[Mo Sheets]

Schedule C

Hi Sparky,

As a former boarding stable owner myself, I would recommend to your clients if they haven't shown a profit in five years.....give up.

Let me clarify....if the only reason they have a loss is due to depreciation expense, I would still consider allowing them to continue as long as they have a well-written business plan and can provide evidence they are moving in the right direction. Otherwise, I would STRONGLY recommend they think in terms of this endeavor as a hobby since that is how I believe the IRS would consider it.

If you remove depreciation from the equation and they still have a loss, I would definately tell them it is time to start thinking about working at McDonald's (just kidding....)

Good luck,

Mo

P.S. Free advice....you get what you pay for AND SOMETIMES LESS!

[JohnH]

Wasn't it two boarding stable owners who were talking about finances and one asked the other what he would do if he won a million dollars in the lottery?

He replied, "Oh, I'd just keep running the boarding stable until I lost it all."

[dmj4]

Maybe they are claiming the expenses for their own horses

At the very least, I would take off everything having to do with their own horses. Many times that will reduce or even end the losses. If there is no clear reason their horses are business, then they are pets and expenses should not be allowed.

On one audit, IRS agreed with the way I was handling that.

[JG EA]

I also do on a C. But the client also gives lessons. It really feels like a C and not an F. (How's that for s scientific approach.) I agree there should be a reduction in expenses for accounting for personal use.

[TaxmannEA]

Production and/or harvesting of food and fiber = Sch F.
Services provided to animal owners or farmers = Sch C

[DaveO]

We have one stable operation here. They show a profit once all the feed, vet care and expense for their own horses is removed. We take the ratio boarded horses to total horses and use that to allocate the variable expense.

I represented them at audit a couple years ago. Minor adjustments to mileage but the allocations used were accepted by the auditor.