I am trying to enter in a farm asset. it asks if "I purchased this asset NEW" does this mean new to me, new asset for me, brand new tractor?

[Cattlerancher · Accepted solution]

Great question. You purchased 38 cows (breeding stock) and entered them as deprecating assets, good. Was this entered as a single asset group purchase (38 cows X $1000/hd =$38000) or each cow individually? What you will do is Edit the asset to report how it was disposed of from your farm business. This is done easily if the cows are entered individually. If 5 died you report that you sold them for Zero dollars. Then TT will remove them from your Asset Summary for next year. If they died after owning them less than a year this will result in a short term business loss reported on form 4797, part ll.

Here is a link to another Q&A you may find helpful;

https://ttlc.intuit.com/questions/3587134-our-cows-which-we-listed-as-assets-last-year-had-calves

[ams3261]

Ok i actually just added them as asset for 2016. I listed it at 38 head at the total value. How do I get to the part for form 4797. When reading on irs.gov looked like they needed to be filed on form 4684? how will TT get me to this part?

[ams3261]

They died in the first few months of ownership

[Cattlerancher]

You can enter them on 4684 but you will only benefit if you itemize on schedule A. That is done under Personal Deductions, Other Deductions and Credits, Casualties and Thefts.
If you reported them as a group purchase you will still need to Edit this asset. Using the example above in the answer of 38 cows for $38000, you will reduce the head count from 38 to 33, then reduce your cost basis in the group from $38000 to $33000. This has removed 5 cows from that group. That 33 cow asset will remain. Now you re-enter those 5 dead cows as a new asset, 5 hd X $1000 =$5000. Edit this asset to report they were sold or disposed of from your farm, (sold for zero dollars). TT will automatically enter the loss onto form 4797, part ll.

[ams3261]

Do I select breeding cattle as "I purchased this asset NEW"

[ams3261]

Sorry just a little confused so when I add the asset of 5 and it asks for the cost do i input what i paid for them? when I mark sold/disposed it doesn't ask me for a sold for value just a date

[ams3261]

Also if my neighbor had our adjoining fence rebuilt and we paid our portion in barter by giving him 3 heifers, how does this work?

[Cattlerancher]

Cows are not a brand new asset, don't click that box. Yes, that is a confusing question.
When you add the asset of 5, yes you add your actual cost for those 5 cows. After checking the box sold/disposed of, enter the date they died, use an average date. They just want to know how long you owned them, S/T gain or L/T gain. After entering the date click Continue, next click NO, next enter the sales price as $0 and click sec 1245 cattle and horses. Done. You should be able to review form 4797, part ll to see your loss. Note; Breeding stock does qualify for sec 179 if you choose to use it.

[Cattlerancher]

Did you purchase the 3 bartered heifers? Or raise them from birth?

[ams3261]

Raised from birth

[Cattlerancher]

That makes it easy. There is nothing to do in TurboTax. Your cost in the new fence is 3 less heifers in your herd. No loss to report of the heifers used in a trade/barter because you already expensed the cost of raising them.

[ams3261]

and i dont have to claim income on the portion of the fence provided in exchange?

[Cattlerancher]

Just thinking this out loud ------. How would paying for a portion of the new fence with 3 heifers cause you to receive/claim current year income? It was an expense for you/your farm. I could use a fence builder on our place, coming up soon too! Not my favorite job. (:-)

[ams3261]

Apologies I thought I responded. In reading on barter in TT and irs.gov; TT made it sound like both parties have to consider what they received in barter as income and business income if related to your business? irs.gov made me lean toward only the one that received the payment had to claim as income and in the case the neighbor that received my cows. Its all a little confusing to me still : P