Expenses for FFA project

[TXcrude]

My daughter received a 1099-MISC for 2024 which was mostly for the sale of an animal in February 2024, however, the animal was purchased in 2023. She also purchased an animal in 2024 but that one was sold in February 2025.

When you document expenses for an FFA project do you list the purchase price of the animal from 2023 or 2024?

[DianeW777]

The purchase price is for the animal sold (2023). If the animal sold in 2024, is the same one purchased in 2023, this is what you use to report the gain on the sale.

This would appear to be a hobby, and not a business. You can decide if it is hobby or business income.  This IRS link will help you: Business or Hobby?

Key elements:

1. A hobby requires you to report the income you received and under the current tax law, Tax Cuts and Jobs Act (TCJA), no expenses are allowed to be used to reduce the money collected even if you itemize deductions.
2. A business allows you to deduct the costs necessary to obtain the income.  The law explains that 'you must be engaged in the activity to produce a profit'.  The test under IRS tax law is that you must show a profit three out of every five consecutive years to be considered a business.

Hobby income should be reported using the steps below.

Other Miscellaneous Income:

1. Go to the Wages and Income  section of TurboTax
2. Scroll to  Less Common Income > Select  Miscellaneous Income, 1099-A, 1099-C
3. Select Hobby Income and Expense > Enter the income

@TXcrude

[Edited: 03/22/2025 | 2:22 PM PST]

[TXcrude]

Diane,

I figured that I should use the purchase price of the animal from 2023 even though I am filing the taxes for 2024.

It was purchased 9/2023 and sold 3/2024.

Similarly, I will attach a detailed log of expenses for feed, medication and other supplies for the time period from 9/2023 and sold 3/2024.

If I only submitted expenses for 2024, it would not leave much for our next animal which was purchased in 2024 and sold in 3/2025.

I just wasn't sure how the IRS handles that since typically you can only deduct expenses for the year that you are filing.

It is so much hassle to file taxes for 4H/FFA considering that the majority of students don't make any or very little profit from raising an animal and usually end of with a loss. (Example: a pig for a major show costs $500+ but unless you place in the top ranks sells for $0.30/lb which ends up $90-100 and they spent like $1,000 for the animal and the cost of raising.)

On top of that you cannot file electronically but have to mail in the return with a detailed explanation of expenses and revenue. Last year she owed $100 so I just paid but this year it is $250 since she also had a part-time job, so I am going to try the mail route which should actually get her a $35 refund.  😉

[DianeW777]

You can file by mail as you indicate or you can follow the steps below for self employment, which it seems you are trying to do.

If you are filing a self employment Schedule C, which would allow the expenses you discuss are ordinary and necessary to maintain the health of the animal and not part of the cost to purchase. If  you use this method, then the results would be similar to what you have and e-file would be allowed.

1. Search (upper right)  type  schedule C, then click the Jump to ... link
2. Follow prompts, you might be prompted to an upgrade if you have expenses

Business address is her address, and business name is her name. The business code can be 999999. You can enter the 1099-MISC as the income and delete the original entry of that form.

• If you're using TurboTax Online software and need to delete a form, click here.
• If you're using TurboTax Desktop software and need to delete a form, click here.

@TXcrude