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If I file a Schedule F this year and by next year realize I cannot make a profit, will I be responsible for repaying the tax break I earned previously?
If I continue filing Schedule F and am at some point labeled a "hobby farm," must I repay everything from all previous years?
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If I file a Schedule F this year and by next year realize I cannot make a profit, will I be responsible for repaying the tax break I earned previously?
If the IRS classifies your farming business as a hobby, you'll have to prove that you have a valid profit motive, or you'll no longer be able to claim the losses related to the business from that point on. If there is no fraudulent intent, you'll not lose the tax benefit from the losses previously reported.
Please refer to this TurboTax article for more information:
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If I file a Schedule F this year and by next year realize I cannot make a profit, will I be responsible for repaying the tax break I earned previously?
If the IRS classifies your farming business as a hobby, you'll have to prove that you have a valid profit motive, or you'll no longer be able to claim the losses related to the business from that point on. If there is no fraudulent intent, you'll not lose the tax benefit from the losses previously reported.
Please refer to this TurboTax article for more information:
**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"
**Mark the post that answers your question by clicking on "Mark as Best Answer"