I currently am a contractor in the gas industry I would like to start selling hay on the side can I do this and write the expenses off and file as a farm?

Forum|Forum|7 years ago
July 30, 2019
2 replies
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TurboTax Deluxe Online

Critter

Level 15

There is nothing that stops you from selling hay and reporting it on the Sch F ... make sure to keep accurate records of all income and expenses for this venture.

Anonymous

one thing to consider is will this side business produce a profit 3 years out of 5. if not, the IRS might deem this a hobby and in that case disallow expenses in excess of revenue. say you don't habe the 3 out of 5 and the IRS deems it a hobby. you can provide evidence that it's not. such as a business plan, hours worked at this, early year losses due to start up and other factors, value of farmland increasing more than losses.

here some further guidance

https://www.law.cornell.edu/uscode/text/26/183

https://www.taxdebthelp.com/business/irc-183-hobby-loss-rule