Just a quick question for those of you that claim your income on your taxes if you breed and sell snakes. In my first year I claimed my profit and expenses on my taxes, sence then its been a P0 loss each year. I suppose I could claim my losses but I do not. I have been told that if a business claims losses for 2 years the powers that be tend to make sure they shut them down. Anyone have any comments on this? Clearly we are not getting rich and I am sure I am not the only one that takes a loss with there breeding. Has anyone claimed a loss year and year again and not had any problems? I do everything right meaning I am licensed to run a business and the whole ball of wax. I have worked hard for this and would hate to loose it by continuing to claim a loss. Thanks in advance.
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Breeding "profit and tax question"?
Replies (4)
Government cannot "shut down" a business for lack of profit. The business, however, must be a business and not a hobby. A business has detailed bookkeeping, inventory, purchase orders, invoices, advertising, a biz plan, marketing plan........
amazon.com went 7 years (or so) without profiting.
A hobby can write off expenses against profits up to the total profit. It cannot write off losses beyond or without them.
This knowledge comes from having done both here in SoCal.
I am not an attorney or an accountant, nor do I play one on TV.
>>Just a quick question for those of you that claim your income on your taxes if you breed and sell snakes. In my first year I claimed my profit and expenses on my taxes, sense then its been a P0 loss each year. I suppose I could claim my losses but I do not. I have been told that if a business claims losses for 2 years the powers that be tend to make sure they shut them down. Anyone have any comments on this? Clearly we are not getting rich and I am sure I am not the only one that takes a loss with there breeding. Has anyone claimed a loss year and year again and not had any problems? I do everything right meaning I am licensed to run a business and the whole ball of wax. I have worked hard for this and would hate to loose it by continuing to claim a loss. Thanks in advance.
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AMAZON REPTILE CENTER
Thank you much for the incite, its much appreciated.
Foot Hill Reptiles
You shouldn't have filed anything the first year. A hobby has to turn a profit 2 years in a row before you can try for the deductions. If profits are small or in the red, you don't have to file anything and your losses don't count till you climb that profit mountain mentioned above. There's also the full time vs. part time gig mentioned in the tax form booklets.
I wouldn't rely on asking the IRS for help. Have you tried "TaxMama.com?
Mike
No I have yet to try that. I usually rely on H&R Block for my Tax info, Maybe not smart.
Foot Hill Reptiles
