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Rural Tax Education

Losses

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Disaster Losses And Related Tax Rules, Jc Hobbs Sep 2017

Disaster Losses And Related Tax Rules, Jc Hobbs

Rural Tax Education

The dollar value of property losses due to fires, floods, tornadoes, earthquakes, lightning, freezes, etc. can be substantial. Federal income tax regulations often provide relief by allowing deductions for losses of both business-use and personal-use property. This fact sheet describes losses to property, the process used to determine if you have a deductible loss, how insurance proceeds and cost share benefits are treated, and how to reconstruct records to document a loss. Examples help explain the rules that apply to property found on the farm including buildings, machinery, livestock, feed, supplies, personal residence and the contents and personal vehicles. A …


Farm Losses Versus Hobby Losses: Farmers Must Plan Ahead To Avoid Adverse Tax Consequences, Jc Hobbs Sep 2016

Farm Losses Versus Hobby Losses: Farmers Must Plan Ahead To Avoid Adverse Tax Consequences, Jc Hobbs

Rural Tax Education

The hobby loss rules which determine whether a venture is a business or a hobby, is a frequently misunderstood area of tax law that causes producers who are experiencing difficult economic times to worry, perhaps unnecessarily, that the venture will be viewed as a hobby rather than a true business venture. This article is intended to provide information to help producers reduce the likelihood that the business venture will be deemed a hobby.


Net Operating Losses, Philip E. Harris Aug 2011

Net Operating Losses, Philip E. Harris

Rural Tax Education

Weather, disease and variable prices for inputs and commodities cause farmer’s income to fluctuate from one year to the next. Farmers can minimize their income tax liability by managing the timing of their income and deductions to keep their taxable income level. In some cases, the leveling technique is not enough to avoid a spike in taxable income or a dip that causes taxable income to go below zero. The tax effect of the spikes can be minimized with income averaging rules. The tax effect of the dips below zero can be managed with the net operating loss (NOL) rules …