What defines a "working ranch"

[BarBranch]

Ranch owned since 1951 and is in California, held in family trust currently. An issue has been raised as to a possibly tax hit if the cattle lease is not renewed. Is there a requirement that income be shown to gain the 'working ranch' definition or can one just declare it?
Thank you

 

[tranquility]

I don't do agriculture/farms, but I believe the issue is if it is a hobby or a business. A cattle lease make me think more of a business, but it would only be one factor.

But, if you're having losses year after year anyway, you are going to have some problem proving up a profit motive. (Although farms seem to get away with a lot on this.)

 

[justalayman]

BarBracnh, what are you going to be doing with the ranch once the cattle are not involved? Is it even going to be used as a ranch at all? And if so, will it be operated as a business or just a hobby?

 

[Mass_Shyster]

Ranch owned since 1951 and is in California, held in family trust currently. An issue has been raised as to a possibly tax hit if the cattle lease is not renewed. Is there a requirement that income be shown to gain the 'working ranch' definition or can one just declare it?
Thank you

What type of 'possible tax hit' are you referring to? Income? Real Estate?

I know some real estate is taxed at a lower rate for agriculture.