Farm expense loss

veban — Thu, 06 Jun 2019 07:15:44 GMT

We bought a small farm about 16 months ago and had quite a bit of work done on it brush removal, fences built and other bulldozer work. I am somewhat confused on how much we can claim this year. Help?

According to the IRS, in order to claim farm losses you m...

ShawnaD — Thu, 06 Jun 2019 07:15:45 GMT

According to the IRS, in order to claim farm losses you must also have farm income.

If you are not getting a deduction from your farming losses, this may mean that your farming losses are considered passive losses and are subject to the passive activity loss limitations.

From the IRS website:

If your deductible farm expenses are more than your farm income, you have a loss from the operation of your farm. The amount of the loss you can deduct when figuring your taxable income may be limited. To figure your deductible loss, you must apply the following limits.

The at-risk limits.
The passive activity limits.

If your deductible loss after applying these limits is more than your other income for the year, you may have a net operating loss.

TurboTax will assist in calculating these for you when you enter your information into the program, and also assist on the carry-forward for your net operating loss.

For determining if your farming losses are deductible against your taxable income, please refer to this link, scroll down to "Losses From Operating a Farm": https://www.irs.gov/publications/p225/ch04.html#en_US_2015_publink1000217987

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Farm expense loss

According to the IRS, in order to claim farm losses you m...