The expenses of purchase, along with the cost of
feed, supplies, and veterinary care, may be claimed as expenses to reduce the
taxable income resulting from the eventual sale of the pigs. You can only deduct up to the amount of income earned.
The following is taken directly from IRS Pub. 225 Farmer's Tax Guide:
"4-H Club or FFA project. If
an individual participates in a 4-H Club or National FFA Organization (FFA)
project, any net income received from sales or prizes related to the project
may be subject to income tax. Report the net income as “Other income” on line
21 of Form 1040. If necessary, attach a statement showing the gross income and
expenses. The net income may not be subject to SE tax if the project is
primarily for educational purposes and not for profit, and is completed by the
individual under the rules and economic restrictions of the sponsoring 4-H or
FFA organization. Such a project is generally not considered a trade or
business."