As a CPA I can confirm the answer Bill gave is correct. In case his example wasn't clear let me expand on it a bit.



You pay $500 for a snake in year one. You are going to depreciate that cost over the useful live of the snake the same way a business would a piece of equipment and you go with 5 years (for example purposes). In year one you would have on your balance sheet a snake with a "net" book value of $400. $500 of cost as a debit and $100 of accumulated depreciation as a credit. The offsetting debit to the accumulated deprecation would be depreciation expense.



The entries your accountant would book would look something like this:



Snake $500

Cash ($500)

To record the purchase



Accumulated Depreciation $100

Depreciation Expense ($100)





So if the snake dies the next year you would only recognize $400 of expense because you took $100 in the first year.



Keep in mind if you don’t have any revenue to offset the expenses they do you no good.



Keep your receipts or some other documentation to substantiate your cost. Oh – guess what might happen when you start telling the IRS about all the money you paid Breeder Bob for your snakes…who do you think they might start looking at next.

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