# are "lost" cattle a write-off?



## CrashTestRanch (Jul 14, 2010)

HYPOTHETICAL tax question:

say we have our losses (+/- 3-5%) are they a write-off? 

What proof is required? Do we save the carcass for the tax man :hysterical:


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## francismilker (Jan 12, 2006)

It depends on if you lose a calf you raised on the place which technically didn't "cost" you anything or if it was an animal you purchased. Loss write-offs are really touchy and it kinda depends on how ethical or un-ethical I should say you're willing to be. You really need to consult a tax person who in the know about farm taxes in particular. 

It never ceases to amaze me what some are willing to call a loss in the name of tax evasion! Not saying you would, just saying I've got some neighbors who "loose" cattle that they never owned and it gripes me to see them slipping through the cracks year after year driving new vehicles and buying tractors that cost more than my house while I drive a clunker and make do with what I have because I'm honest about it. 

Sorry for the rant........I just had to get up on a soapbox.


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## onthespot (Oct 7, 2007)

What frost me is that there are so many taxes piled up on hard working folks that you can do right, bust your hump all year, avoid any serious bad luck and STILL have to drive a clunker and make do...


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## CrashTestRanch (Jul 14, 2010)

francismilker said:


> It depends on if you lose a calf you raised on the place which technically didn't "cost" you anything or if it was an animal you purchased. Loss write-offs are really touchy and it kinda depends on how ethical or un-ethical I should say you're willing to be. You really need to consult a tax person who in the know about farm taxes in particular.


So if we have a calf born on site and it dies from xyz, etc, there's no write-off, but if I purchased the calf it's a go ...  that doesn't make no sense ...

was thinking about this during dinner, gonna look for local tax specialists who work in AG ...



onthespot said:


> What frost me is that there are so many taxes piled up on hard working folks that you can do right, bust your hump all year, avoid any serious bad luck and STILL have to drive a clunker and make do...


it's the same in every endeavor I've pursued ... if they're willing to "bend" the rules, they will succeed ... aaaaaaaarrrrrrgggggggggghhhhhhh

follow the rules, pay the taxes and get no where, I do sleep good, and still get audited, I still buy used stuff 80% of the time, vehicles, reclaimed material etc ... but again I sleep good


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## anvoj (Feb 1, 2010)

"It depends on if you lose a calf you raised on the place which technically didn't "cost" you anything"
Wouldn't the cost of keeping the cow to carry the calf to term count as the input into that calf? Hay, feed, etc?


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## myersfarm (Dec 24, 2004)

anvoj but the price to keep a cow a year is a undetermentable price..some rule benders would say it cost $1000 to keep there cow...but now if the calf is STOLEN after you know you have one and get a police report your a go in Missouri


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## anvoj (Feb 1, 2010)

I'm not talking about bending the rules, just saying- ok the going rate for hay in the area is however much and the number of days needed to feed in a given year are so many, plus a reckoning of grain and vet bills, etc. Even if you lowball it to be safe, it doesn't seem like $0 is reasonable. Or couldn't you just get a price from whatever calves are selling for in the area and claim an average price as your loss?


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## haypoint (Oct 4, 2006)

Your farm grows crops and cattle. You have expences, fencing, seeds, fertilizer, sale barn calves, whatever. You save receipts. You sell some grain, you market some beef, you sell a tractor. You save receipts. End of the year you add up what money came in and subtract what it cost you to run the farm. You pay taxes on what you earned.

If you have losses, you might want to keep real good records. Wouldn't hurt to keep a daily log of farm activities, " May 23, That hard to handle cow, Maybell, had her calf way back in the cedars. It is a bull calf and sucking fine. May 24, saw Maybell today, no sign of her calf, must be sleeping under a cedar. May 25, found parts of the bull calf out of Maybell. Looks like the coyotes got him, crows finishing things up.....

Areas with bovineTB, farmers have to account for "lost" cattle bacause without a TB test you can't sell cows to other areas and spread TB. Simply note which ones died. Easy to do with RFID. Not sure how you'd "lose" a cow, like just gone?

Setting the value of a lost cow might matter if you had them insured, but that's an insurance matterr, not a tax problem.


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## francismilker (Jan 12, 2006)

Essentially, there are write-offs for cattle that you raised on your place in the wide, vast area of expenses, ie. feed, fence, depreciation, equipment, and etc... However, it still stands true of what haypoint says. "Keep receipts". 

I guess in theory there is a tax write-off to a losing a calf that was born on the place if you look at your overall income being lowered and your expenses not doing the same. In fact, they might even increase if you had to medicate the animal before the loss. Those meds and feed expenses for that particular animal are deductible. Taxes are a tricky deal and I think the Grand Ol' IRS leaves too many things in the gray area. (Not quite certain about an organization that has more rules in their tax code than the number of words printed in the Bible!)


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## FEF (Jan 30, 2007)

CrashTestRanch said:


> So if we have a calf born on site and it dies from xyz, etc, there's no write-off, but if I purchased the calf it's a go ...  that doesn't make no sense ...


If you're writing off the expense of keeping a cow, feed, vet, fences, etc., then you're essentially writing off the cost to get the calf born on your place that then dies. You can't claim a write off for money you might have made if had lived until you sold him. But if you go out, spend money, buy an animal that dies, you have a loss. 

And, yes, sleeping well at night is worth something. IMO, being honest with your taxes is just easier on all concerned than trying to cheat.


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## agmantoo (May 23, 2003)

CrashTestRanch

I understand the accounting process for losses occurring before the profit is earned.

For me what I have a problem with is charging a fire tax on land that does not have a structure. I cannot take a loss for the timber or the crop that is damaged or lost because the land still exists but I have to pay the fire tax on the land regardless. I have no problem paying a fire tax on my home and the supporting structures of the farm enterprise.


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## FEF (Jan 30, 2007)

anvoj said:


> "It depends on if you lose a calf you raised on the place which technically didn't "cost" you anything"
> Wouldn't the cost of keeping the cow to carry the calf to term count as the input into that calf? Hay, feed, etc?



Yes, but most of us claim the cost of maintaining that cow as expemptions on our taxes. So we'd be double dipping if we then turn around and claim the loss of the calf.


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## CrashTestRanch (Jul 14, 2010)

ok, 

costs to calve are write-offs?

costs to raise to market are write-offs?

costs to bury animal write-off? (fuel/labor, etc)

the actual animals "worth" is not? (we do not set the market prices, so this little tidbit really ticks me off)

midget manufacturer makes a widget to completion, upon getting widget into shipping container, widget is damaged beyond repair and is scrapped. Manufacturer can only claim the write-off up to the point of shipping or anytime prior in the process, not for the completed widgets price, because said widget never made it to the end user as a completed transaction with monies received? 

agmantoo, I'm totally with you on the fire tax without compensation, that is pure BS in my book.


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## 65284 (Sep 17, 2003)

CrashTestRanch midget manufacturer makes a widget to completion said:


> Your widget example is pretty well right on. And here's another happy little nugget for you; if you sell the damaged widget for scrap you must report the proceeds of that sale as income.


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## CrashTestRanch (Jul 14, 2010)

65284 said:


> Your widget example is pretty well right on. And here's another happy little nugget for you; if you sell the damaged widget for scrap you must report the proceeds of that sale as income.


Income less costs/overhead, etc ...


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## shagerman (Apr 10, 2008)

in illinois. it doesnt matter. you can not write off a calf unless it is bought then dies.. just like my pigs. if i have a litter of baby pigs. and half of them die.. to bad .. it is a lose to you. but if i buy a sow and she dies then its a write off. but only her. if she has babys and i loose half the litter. that is on me. and it doesnt matter about the fences and feed and everything else. you only get the expence of when you bought them,


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## sassafras manor (Dec 5, 2009)

Not to jump in.... but shagerman i have a quick question. I also live in Illinois and from what I understand the cost of my feeder calves cannot be considered an expense in the year they are purchased but rather in the year they are sold. Is that correct? This is our first year in which we are claiming farm status and want to make sure I understand a few things correctly. Thanks for the help and sorry for the highjack!
Matt


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## Michael W. Smith (Jun 2, 2002)

You have to feed your cow whether or not she is going to calf or not.

Income is the money you make on selling items - hay, grain, animals, etc.

To offset your income, you write off things you purchased - aniamls, feed, fertilizer, seed, fence, etc.

Having a calf born on your place and then dying isn't really a loss. Yes, the mother ate grain and hay to grow that calf inside her, and once born, you may have had to bottle feed it with milk replacer, etc. But you should be writing off any purchases you make anyway - feed, milk replacer, etc.

Yes, you "lost" possible income - you might have sold that calf to someone for $200.00, but you can't claim it as a loss. At least in my book. I'd also say you can't claim an animal you buy as a loss either. (You can claim the purchase price of it as an expense for the year, but you can't turn around and say the cow I bought for $200.00 was worth $500.00 so I "lost" $300.00.)

Dead animals are just part of farming.

Expenses are items you have bought - things that you have a receipt for.
Income are items you have sold - things you should have sold with a receipt.


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## shagerman (Apr 10, 2008)

sassafras manor said:


> Not to jump in.... but shagerman i have a quick question. I also live in Illinois and from what I understand the cost of my feeder calves cannot be considered an expense in the year they are purchased but rather in the year they are sold. Is that correct? This is our first year in which we are claiming farm status and want to make sure I understand a few things correctly. Thanks for the help and sorry for the highjack!
> Matt


wrong... i buy feeders and they are on my taxs for that year, and when you sell them. you get that write off. and all the feed in between. here is my email. [email protected].. if you need more help i can hopefully answer,


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## shagerman (Apr 10, 2008)

Michael smith.... Very well said. Thank you.


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## CrashTestRanch (Jul 14, 2010)

would the "renderer" be a write-off?


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## oneokie (Aug 14, 2009)

CrashTestRanch said:


> would the "renderer" be a write-off?


Only if you have out of pocket expense for the renderer to come and pick up the carcass, or to dispose of carcass.


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