TAXES :-) Can we right off snakes we bought?

[Prognathodon]

Find a CPA who has other animal breeders as clients. The IRS is going to care less about the differences between dogs and snakes than we do.

As for keeping your breeding as a hobby, that does NOT get you off the hook come tax-time! You (general-you) have to report income and pay taxes on income from a “hobby” as well as from a business.

The hobby/business divide is driven primarily by profit - if the IRS (and by extension your state department of revenue) think that you aren’t tying to be profitable/sufficiently profitable, a business can be classified as a hobby, which means you don’t get to write off certain things. When I started my business 20-mumble years ago the simple formula was that you had to show a profit X out of the first Y years, and then A out of every B years thereafter.

And note that the IRS’s definition of profit may not be the same as yours - profit is *not* purchases minus all purchases and expenses for the year. In my case it’s cost of goods sold minus certain tools, hardware, and certain limited expenses like cost of booth space at shows.

So leather, thread, and needles (because needles wear out/break in a fairly short time period) only come into the profit equation when figuring my cost of goods sold. If I buy a new widget of under $Some I can write it off completely that year, but if I buy a big thing over $Lots, it must be depreciated over a number of years determined by the IRS.

I am not a lawyer or an accountant, point yourself at the IRS and state department of revenue website for all the facts and details.


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