Cattle and Schedule F

[oceanlovin'ea]

I have a client who has started raising cattle. He has gotten his land ready and bought some cows. Will sell some in 2012, I'm sure. But in 2011 he bought 14 cows for $6000. One of them died. He says it was a calf and worth $400.

Is this a deductible expense? I would think so but I wasn't sure how to list it. He is a schedule C person.

Thanks.

Linda, EA

[spanel]

I have a client who has started raising cattle. He has gotten his land ready and bought some cows. Will sell some in 2012, I'm sure. But in 2011 he bought 14 cows for $6000. One of them died. He says it was a calf and worth $400.

Is this a deductible expense? I would think so but I wasn't sure how to list it. He is a schedule C person.

Thanks.

Linda, EA

Was the calf born on his land or did he purchase the calf? He wouldnt say its worth $400 if he bought it for $400(he would say he bought it for $400). If it was born to his cows he bought for $6000.. no deduction.

Chris

[WhiteOleander]

I have a client who has started raising cattle. He has gotten his land ready and bought some cows. Will sell some in 2012, I'm sure. But in 2011 he bought 14 cows for $6000. One of them died. He says it was a calf and worth $400.

Is this a deductible expense? I would think so but I wasn't sure how to list it. He is a schedule C person.

Thanks.

Linda, EA

Remember, this will be a Sch F, not Sch C. If the calf was born to one of the cows he bred after the cow was purchased, then, he has no loss in the way he is thinking. His loss is in wrting off the feed etc in the care of the cow and calf.

If, the calf was purchased, he can write off the purchase price. If the calf was born to a cow he purchased when the cow was pregnant, he can write off what portion of the purchase price can be percentaged for the unborn calf. Sometimes there is a higher price paid for the pregnant cow.

[Jiggers]

I have a client who has started raising cattle. He has gotten his land ready and bought some cows. Will sell some in 2012, I'm sure. But in 2011 he bought 14 cows for $6000. One of them died. He says it was a calf and worth $400.

Linda, EA

Which is it? Cows purchased or calves purchased? Can't be both. And there is a difference.

If they were cows and purchased in 2011, are they on the depreciation schedule for Schedule F for 2011?

[oceanlovin'ea]

Yes. I know that it is a schedule F. Just typed the wrong letter.

I can't remember right now the exact circumstances. It was several months ago that she was in and we need to finish the return. I think he bought 14 animals, probably some calves and some cows.

But at least now I have the answer for whichever situation it is.

Thanks.

Linda, EA