Re: Farm Loss (Hobby or business)

[Gail1999]

Re: Farm Loss (Hobby or business)

What is the name of your state?Kentucky


How do I know if it is considered a hobby or business. We are trying to make a profit at it but so far no luck. How long can I claim a loss on our taxes. I have been told 3 years, 5 years, 7 years. Where can I find this information?

 

[Snipes5]

Each case is taken individually. If you can prove to the IRS that you are doing everything possible to turn a profit, you'll be fine. Keep good records.

For race horses, you are considered to be in business if you turn a profit 2 out of 7 years. For most other businesses the general guideline is 2 or 3 out of 5 years.

Snipes