Breeding and the IRS

[Hypnotic Exotic]

I don't think you can necessarily claim stuff like racks unless you can prove its a business (3 out of 5 years with a profit). Equipment that is used over multiple years such as cages, thermostats, buildings, as well as the animals themselves have to be depreciated over their estimated life (IRS has guidelines for some of this). You can't just expense them. I don't believe you can deduct depreciation if its designated a hobby if I remember correctly but would have to double check. Basically if its a hobby, you are pretty much looking at food, bedding, cleaning supplies, expos, travel expenses, etc. and can not deduct in excess of what you make so you can't have a loss.

[RichsBallPythons]

I don't think you can necessarily claim stuff like racks unless you can prove its a business (3 out of 5 years with a profit). Equipment that is used over multiple years such as cages, thermostats, buildings, as well as the animals themselves have to be depreciated over their estimated life (IRS has guidelines for some of this). You can't just expense them. I don't believe you can deduct depreciation if its designated a hobby if I remember correctly but would have to double check. Basically if its a hobby, you are pretty much looking at food, bedding, cleaning supplies, expos, travel expenses, etc. and can not deduct in excess of what you make so you can't have a loss.

You Most certainly can claim ANYTHING you bought. Just cant keep claiming it year after year, Once and done.

If you build your own racks, Save the receipts of materials as labor dont count here.

[WingedWolfPsion]

I use Jackson Hewitt...H&R Block was a ridiculous disaster.
No way am I going to try to do it myself.

I usually at least add up all of my receipts and information, but sometimes I hand them over to the agent, lol.

Some of my equipment was set up to depreciate, some I just claimed full purchase outright.
Not really worried about being audited, but if it happens, I feel sorry for the person who has to do it, because I really am not organized, and have no clue how to get that way.

I will hire someone to do my accounting in the next few years, lol.

Keep track of: All animal purchases, all supplies related to animal care, all equipment purchases, website and domain name fees, and car mileage for trips you make ONLY to purchase business-related things, or sell business-related things. You can also claim your reptile facility if it is a separate area of your home (or a separate building), and you use it for ABSOLUTELY nothing else. (No storing boxes in it, etc). You calculate it as a percentage of the square footage of your home. Being able to prove everything is crucial. You cannot claim anything that has a dual purpose. (If you buy a vacuum cleaner, and you use it for both your home and reptile room/facility, you can't claim it. If it's ONLY used for the reptile room, and never anything else, then you can).

[Hypnotic Exotic]

You Most certainly can claim ANYTHING you bought. Just cant keep claiming it year after year, Once and done.

If you build your own racks, Save the receipts of materials as labor dont count here.

Typically equipment used over multiple periods is depreciated, not expensed. However, in the case of small businesses, there is an exception now which is detailed at the below link. Sorry for the confusion. It's been a while since I sat for the CPA exam and I don't work in accounting at this time so a bit rusty. I think based on this that all of us would probably fall within the limits of being able to expense them. Just remember, if you only qualify as a hobby, you can't deduct them if they put you at a loss for the year:
http://www.irs.gov/newsroom/article/...233824,00.html

[Smoky024]

Anything you sell should be claimed as income and if you're audited they will ask for all of your business and personal bank statements and you will have to explain any deposits into the account. All expenses (utilities, supplies, food, bedding, website, dedicated phone line, travel, shipping etc) can be deducted if you have receipts and proof of payment. Remember that the burden of proof for all expenses is on the taxpayer, so no receipt no expense if you're audited. Anything like racks and breeder snakes should probably be depreciated. You could probably use 179 for racks if you’re small scale. Breeder snakes should be treated like livestock and depreciated and then any offspring produced would have a basis of zero.

[Raverthug]

Now how do you do it if you own all the animals and decide to start a business then? Do you sell it to your self based on credit or......

[WingedWolfPsion]

If you are a sole proprietorship, you don't have to worry about that.

[SHROP]

If you are a sole proprietorship, you don't have to worry about that.

If your interested pm me and ill get you the info of a good cpa here in town. shes done my taxes a few years back when i was a 1099 contractor and she only charged me like 50 bucks. she is doing my wifes this year.


on a side note i have an albino male this year that i bought, not sure if your still looking for one pm me for details.

ttys

[WingedWolfPsion]

SHROP, that would be FANTASTIC. Thanks!

[milha]

Now how do you do it if you own all the animals and decide to start a business then? Do you sell it to your self based on credit or......

if you are in this situation and have not saved receipts or had paid in cash, how will you prove you had purchased the snakes in first place?

thanks