Hobby losses for Goats Sold

[Super Mom]

If we deem this activity to be indeed a hobby and not a business, the taxbook says gross income minus cost of goods sold. Feed is COGS right?

[RitaB]

Don't think so

If we deem this activity to be indeed a hobby and not a business, the taxbook says gross income minus cost of goods sold. Feed is COGS right?

No, I believe COGS here is just the purchase price of the goats (if any). Feed is an expense, and would be deducted on Sch A for a hobby, I believe. See page 27 of the document below (feed is listed as an expense). See also Sch F. Feed is an expense there.

https://www.irs.gov/pub/irs-utl/irc183activitiesnotengagedinforprofit.pdf

[Super Mom]

Thanks Rita!

[TAXNJ]

Question

No, I believe COGS here is just the purchase price of the goats (if any). Feed is an expense, and would be deducted on Sch A for a hobby, I believe. See page 27 of the document below (feed is listed as an expense). See also Sch F. Feed is an expense there.

https://www.irs.gov/pub/irs-utl/irc1...nforprofit.pdf

Is the link reliable since it states on page 1 the following disclaimer:
IRC § 183: Activities Not Engaged in For Profit (ATG) NOTE: This document is not an official pronouncement of the law or the position of the Service and can not be used, cited, or relied upon as such. This guide is current through the publication date. Since changes may have occurred after the publication date that would affect the accuracy of this document, no guarantees are made concerning the technical accuracy after the publication date. Audit Guide Rev. 6/09

[RitaB]

Well, na, you got me there

I don't know why I can't quote your post here, TAXNJ, but no, it is not reliable for every purpose. But all I was trying to achieve was reassuring the original poster that feed is an expense and not a COGS. I thought my post lent a little more credibility than simply saying, "Feed is an expense. Trust me I know." I don't think IRS will reverse that position, since it is correct, and since it does not favor the taxpayer. Explaining that feed is not a COGS is all I wanted to accomplish.

[TAXNJ]

Accomplished

I don't know why I can't quote your post here, TAXNJ, but no, it is not reliable for every purpose. But all I was trying to achieve was reassuring the original poster that feed is an expense and not a COGS. I thought my post lent a little more credibility than simply saying, "Feed is an expense. Trust me I know." I don't think IRS will reverse that position, since it is correct, and since it does not favor the taxpayer. Explaining that feed is not a COGS is all I wanted to accomplish.

You did accomplish

[RitaB]

Hahahaha

You did accomplish

You sound exactly like my attorney when he wants me to shut up explaining why I'm right and just does what I say. Hahaha.

[TAXNJ]

That

You sound exactly like my attorney when he wants me to shut up explaining why I'm right and just does what I say. Hahaha.

That's why we get the big bucks they say!

[RitaB]

I concur

That's why we get the big bucks they say!

Y'all sure as %$^& do. Might as well pat my little head if you're gonna express your time in dog hours.