Show horses - Schedule C or F?

[Larmil]

I have a new client who buys and trains show horses. Which schedule do I use?

[Bees Knees]

IRS Pub 225 does not say specifically whether it should be Schedule C or Schedule F, however, on page 26 it discusses the rules for when your farming activity is not carried on for profit. It says:

Presumption of profit. Your farming or other
activity is presumed carried on for profit if it
produced a profit in at least 3 of the last 5 tax
years, including the current year. Activities that
consist primarily of breeding, training, showing,
or racing horses are presumed carried on for
profit if they produced a profit in at least 2 of the
last 7 tax years, including the current year…

I would take that to mean horse training and showing is a farming activity.

[Davc]

I



I would take that to mean horse training and showing is a farming activity.

Or a hobby.......

[Bees Knees]

Or a hobby.......

Well of course it could be a hobby. That is what the paragraph is talking about. A farm activity that is treated as a hobby for tax purposes. If its not a hobby, you use Schedule F.