Ag Law

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Does a landowner or tenant owe a duty of care to someone that trespasses on their property? Most of us would say no, but a recent case in Dunklin County confirms that there are exceptions to that general rule.

Ag Law

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In a lengthy decision, the Tax Court recently underscored the difficulties taxpayers have in convincing the IRS that family-run farms are engaged in for profit. The case, Smith v. Commissioner, T.C. Memo 2007-368, ruled on two families’ limited partnerships, involving a cow and dairy farm, a cutting horse operation and dog breeding. The court held that the cow and dairy farm was engaged in for profit under the IRS hobby loss rules, but not the other activities. The taxpayers had taken significant tax deductions against their income from the activities, thus prompting an IRS audit, which they lost and then appealed to the Tax Court.

The Udder Side of the Story

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One of the main problems I see a lot of is feet. It takes special equipment or effort to be able to work on cattle’s feet. To work on feet it either takes a tip chute, ropes and lots of arm power or drugs. Personally, I don’t like the drugs, they are closer to death. This leaves ropes or the tip chute. I prefer the tip chute.

Ag Law

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In a lengthy decision, the Tax Court recently underscored the difficulties taxpayers have in convincing the IRS that family-run farms are engaged in for profit. The case, Smith v. Commissioner, T.C. Memo 2007-368, ruled on two families’ limited partnerships, involving a cow and dairy farm, a cutting horse operation and dog breeding. The court held that the cow and dairy farm was engaged in for profit under the IRS hobby loss rules, but not the other activities. The taxpayers had taken significant tax deductions against their income from the activities, thus prompting an IRS audit, which they lost and then appealed to the Tax Court. 

Ag Law

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Enforcement action by the Internal Revenue Service has increased in recent months in the farming, horse and livestock fields, partly due to the need for the government to raise revenue, and partly due to an increase in taxpayers failing to file tax returns or failure to pay taxes owed. One of the principal problems with getting audited is that the IRS considers losses to be a red flag for the idea that you are operating a hobby rather than a business in the farming, horse and livestock industries, particularly if you have a principal occupation other than farming.



The Udder Side of the Story

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Everyone is getting ready for breeding season at this time. Are your bulls ready to go? Bulls are very important to the herd. A good bull can change your calf crop very quickly and make or break you. The wrong bull can produce too big of calves, too small of calves (dinks) or not get any of your cows pregnant.

Ag Law

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Enforcement action by the Internal Revenue Service has increased in recent months in the farming, horse and livestock fields, partly due to the need for the government to raise revenue, and partly due to an increase in taxpayers failing to file tax returns or failure to pay taxes owed. One of the principal problems with getting audited is that the IRS considers losses to be a red flag for the idea that you are operating a hobby rather than a business in the farming, horse and livestock industries, particularly if you have a principal occupation other than farming.



Ag Law

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It is a nice summer evening in late June. You and your wife are sitting on your front veranda looking at a herd of cattle you own. A herd whose lineage you can proudly trace back to your great-grandfather. The next morning, you walk back onto your front veranda, coffee-in-hand and you stare in belief: Where is the herd I own? All of the cattle that were there last night are still there but you no longer own them. You have not sold your herd nor has your bank claimed them. No, but overnight, a new state law went into effect declaring that from now on you do not own your animals but, rather, you are their guardian. A new law that abrogates the long recognized law that domestic animals are property that can by owned be individuals and entities.

Ag Law

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It is a nice summer evening in late August. You and your wife are sitting on your front veranda looking at a herd of the cattle you own. A herd whose lineage you can proudly trace back to your great-grandfather. The next morning, you walk back onto your front veranda, coffee-in-hand and you stare in belief:  Where is the herd I own? All of cattle that were there last night are still there but you no longer own them. You have not sold your herd nor has your bank claimed them. No, but overnight, a new state law went into effect declaring that from now on you do not own your animals but, rather, you are their guardian. A new law that abrogates the long recognized law that domestic animals are property that can be owned by individuals and entities.

Ag Law

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Many people who own livestock farms are full-time professionals in non-farming fields. But another large segment of ranching consists of retired individuals who wish to supplement their retirement income with profits from ranching, farming or raising horses.  The IRS often enough will assess deficiencies against these individuals based on the idea that the activity is simply a means of generating tax write-offs. An example of this was the case of Garbini v. Commissioner, T.C. Summary Opinion 2004-7. This involved  the issue of whether the taxpayers were engaged in an activity for profit in connection with a cattle and horse breeding operation in Myrtle Creek, Ore.
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