how many cows do you need to have to get a tax break?

Discussion in 'Cattle' started by Dogwoodhill, Mar 22, 2011.

  1. Dogwoodhill

    Dogwoodhill Member

    Feb 26, 2011
    just wondering. we rent a house on ten acres and we wanted to get cows, i wanted to get a milk cow and then a meat cow or two.. but out landlord lends a lot of the big field already to someonefor their cows. so how many would we have to have on it so she could still get the tax refund or brake or whatever it is that she would get?
  2. linn

    linn Well-Known Member Supporter

    Jul 19, 2005
    You are not going to get much investment credit on a milk cow and none on a beef . Farmers are allowed to take investment credit on breeding animals if they pay income tax on the increase sold from these animals. I don't think you will be able to carry very many cows on ten acres, maybe four adult cattle.
    If you are asking how many acres is considered a farm for filing for farm income you will have to check with your income tax preparer. I think this is more determined on the fact that you intend to make a profit and pay income tax on your profit from the farm.
    Last edited: Mar 22, 2011

  3. ksfarmer

    ksfarmer Retired farmer-rancher

    Apr 27, 2007
    north-central Kansas
    Not sure what you are asking, but, I never heard of a "tax break" for owning cows. As Linn says you can get investment credit and depreciation on breeding stock, and there is a difference when you sell if it is raised cow or purchased. There ain't no "tax break" for simply owning some cows that I ever found.
  4. springvalley

    springvalley Family Jersey Dairy Supporter

    Jun 23, 2009
    As some have said allready, a milk cow or one beef will be nothing more than a benifit for you. You will have to have several cows or cattle to have an income to become a working farm and recieve a tax break for being a farm and not just a home. You also need to make a profit in three years or you just have a hobby and then not really a farm. That will be the only tax break you will get is going from a residence were you live to being a livestock farm. You may even have to be rezoned depending on where you live. But the best thing is to talk to a GOOD agriculture tax man. Good Luck, > Marc
  5. Oxankle

    Oxankle Well-Known Member

    Jun 20, 2003
    The "tax break" in Oklahoma is that you pay no sales tax on feed and supplies used on a farm. In order to qualify you must have a farm tax number, for which you apply. To get one you must file the agriculture income tax forms with the state and IRS.

    I've read in the past couple of years that some tax assessors are contesting the farm exemption where the farms are very small, and one fellow told me that he did not apply in his county because he was told that there was a 5 cow minimum for cattle raisers.

    I suspect that this varies around the country. I've also been told that the IRS has never challenged a small farmer's losses where the losses were small in relation to the income. In short, small farmers can report small losses almost forever. This I would not guarantee--my goal is profit. I'm satisfied with small losses if they are caused by depreciation on new equipment.
  6. sammyd

    sammyd Well-Known Member

    Mar 10, 2007
    Central WI
    If you sell over 1000 dollars from your place you may file a schedule F on your federal taxes and then you may write off certain items that count as farm expenses.
    Their is no rule about making a profit every so often but if you don't and you get audited you had better be able to show that you were actually trying to make the farm work as a farm, not just a hobby.
    You would be well served to contact a CPA and find out if they have any experience with farms. They may cost some to get the taxes done but we have found the money to be well spent.
    Certain states have different rules as to how your property taxes work. Some have acreage limits, some don't there again, a CPA will know the rules.
  7. spinandslide

    spinandslide Well-Known Member

    Jun 6, 2008
    northwest Texas
    Sounds like a good time to talk to an accountant who specializes in ag..
    mine does and he is invaluable on answering questions or helping me understand our laws.
  8. francismilker

    francismilker Udderly Happy! Supporter

    Jan 12, 2006
    Great post Ox! I've been doing this for years now and am also seeing the number of Tax ID cards being issued diminish.
  9. agmantoo

    agmantoo agmantoo Supporter

    May 22, 2003
    Zone 7
    I see you are in Virginia. Whether a deferral for farm use or forestry is allowed in Virginia the state gives the approval to each county to make the decision. Brunswick county Virginia is for certain one county that does not offer that choice to land owners.
  10. ufo_chris

    ufo_chris Well-Known Member

    Apr 30, 2010
    I think he's talking about the CAUV (current agricultural use value) .
    It's a tax brak on real estate taxes.
    Her in Ohio if it's under 10 acres (house and yard does not count) you have to show proof of at least $2500 gross income from farmin. 10 or more no proof is needed.