breeding cattle

[Unregistered]

I have two questions about a client who raises breeding cattle.
1. He has to drive 67 miles each way to tend his cattle which he does sometimes 2-3 days a week. Is the mileage deductible both ways? This is not his primary job, but is a business and not a hobby.
2. What is the advantage of obtaining a sales tax exempt certificate rather than deducting the cost and tax at the end of the year other than a timing issue?
I appreciate any response.

[Snaggletooth]

Tending to Cattle

I've noticed you've gone all day without response - try registering. You don't have to give us a blood sample and directions to your house. Just give us a pen name and it sometimes helps the subject matter if we know your state.

I'll try to answer your first question. The answer is "Yes", Mileage would be deductible at the full rate (43.5 cents/mile and going up).

However, there is a doctrine which can be assessed against this taxpayer. Any expense has to be "ordinary and reasonable." I would not deduct the full mileage unless this guy has a herd of cattle stretching across four counties. How much should he deduct? If you ask 10 of us, you will get 10 different answers. If his herd is sufficiently large, (i.e. he can report a profit) he can deduct it all.

I do have a customer who has 30 acres and 3 cattle. He mows it once a year and sells a few round bales. He says he drives 20 miles one way EVERY DAY. I told him he doesn't have a farm operation, he has a hobby.

Your second question is a good one (at least in my state). Actually, a proper approach to the USE tax portion is that you will pay the proper use tax on internet sales if you have a certificate and report monthly. Not all vendors (particularly out-of-state) will be able to charge sales tax on their invoice even if you insist.

Regards, Snaggletooth

[Jan]

mileage

He has to drive 67 miles each way to tend his cattle which he does sometimes 2-3 days a week. Is the mileage deductible both ways? This is not his primary job, but is a business and not a hobby

I would say the mileage is not deductible from his home. I think this would be commuting
miles, unless he has an office in his home for the business (which he probably does) then the mileage would be deductible.

[Gretel]

I think it's commuting, like going to a second job. If he goes from first job directly to second (farm business), this mileage would be deductible.

[Bees Knees]

Not all facts were given. Maybe this is a ranch out in Wyoming where the ranch is over a 100 miles in length. In that case, the mileage from driving around the property would be deductible.