Where do I list my inventory for my cattle farm on Turbo Tax Self-Employed?

[MichaelL1]

cows and bulls for breeding are capital assets, --cattle held for resale are listed in inventory if you have a cost basis for them.  Can you give me some more detail on the cost basis and if these were purchased to fatten up and sell later.  Thank you

[cpatterson999]

Which is better? I listed them as inventory last year. Do I need to change to assets? My cost is an estimate of market valve at the time.

[MichaelL1]

For a moment lets forget what gives the best tax result and just concentrate on doing it correctly.  For raised cattle your cost basis is really $0.  As you paid nothing for them and expense all the cost.  For livestock you purchased and breed, these are a capital asset and should be listed as such and depreciation taken.

[MichaelL1]

There are some accrual based farmers, however are very rare.  Do you happen to be one of these?

[cpatterson999]

No, cash.

[cpatterson999]

Can I list them as a total herd or list them individually?

[MichaelL1]

For groups that are resold list the whole herd, so, for example, you buy then in the Fall and sell them all the next summer, grouping them is Ok, you may lose a couple but will write them all off when sold.

[MichaelL1]

For breeding livestock bulls and cows that were purchased and not raised, these should be listed individually on the assets worksheet and depreciation taken.

For cattle purchased as feeder cattle and fattened on sold, these would be entered under Purchases in the Cost of Goods Sold area, as farmers on a cash basis (which over 99% are) would just purchases when the cattle are actually sold.

EDITED: 3-6-2018 6:49 AM (CST)

[cpatterson999]

Where do you enter the inventory still on hand?

[MichaelL1]

Go to Cost of Goods Sold area:

Purchases during the year  $$$

equals Cost of Goods Sold (which is deducted on the return for the current year).

[cpatterson999]

I can’t find the beginning and ending inventory. It only shows cost of goods sold, but no entrance for this.

[MichaelL1]

On a Cash Basis Farmer you will not need to keep track of beginning and ending inventory, just the Cost of the Goods (Cattle) sold.  So yours will be the purchases.  I am going to add a picture to the answer above.  Sorry, I confused you a little.

[cpatterson999]

Please send the picture...I am totally confused! Thanks

[MichaelL1]

Do you see the picture I attached to the answer?  Bottom line is year-end inventory does NOT need to be listed on the tax return, however when sales are made, then you put in the cost of the animals that were purchased and re-sold.  I have some good buddies that have cows and bulls they depreciate it and then he sells the calves every Fall to get ready for Spring calving.