Tax write-off questions????

   / Tax write-off questions???? #1  

cgreenway

Member
Joined
Dec 11, 2008
Messages
44
Location
Tennessee
Tractor
09 Kubota B3030HSD-F
My Question is about what I can write off on my taxes??, I work a full time job and file single/no dep. and take the staqndard ded., I have about 3 acres of land and basically all I do is mow the land, no profit from it, I recently purchased a new tractor in MArch of this year and was wondering what/how much if any I could write off of it or claim for a depresiation,
 
   / Tax write-off questions???? #2  
My Question is about what I can write off on my taxes??, I work a full time job and file single/no dep. and take the staqndard ded., I have about 3 acres of land and basically all I do is mow the land, no profit from it, I recently purchased a new tractor in MArch of this year and was wondering what/how much if any I could write off of it or claim for a depresiation,

I think no write off unless your tractor was purchased in support of an income producing operation. Or an operation that could conceivably produce income in the next several years.
Dave.
 
   / Tax write-off questions???? #4  
I am glad you started this topic. I would appreciate hearing from those who use their equipment for side jobs, and therefore can count some expense, and of course realize some income from these tasks. My goal is to use my tractor and attachments for side jobs like food plot preparation, mowing, etc. but only in the future.

I have just purchased the equipment this year (October). There will be no income producing jobs this year, but that is what I want to do in the future. I will comb through the publication mentioned above, but what advice do others have? Thanks
 
   / Tax write-off questions???? #5  
In my opinion, you should consult a good tax accountant.

The IRS publication link is pitched to farmers who file Schedule F. I think you would be filing Schedule C (and associated depreciation forms, including Section 179) if your sole-proprietor business income is from providing custom machine services. However, note that the IRS says that "a sporadic activity or a hobby does not qualify as a business."

Steve
 
   / Tax write-off questions???? #6  
If you bought a vehicle for transportation to and from a place of employment you can often write off the mileage associated with employment. I have done that twice in the last 6 years.
 
   / Tax write-off questions???? #7  
Also consider that the tax rules cut both ways - you may become responsible for sales taxes, property taxes, or other fees by declaring you have this equipment. Checking with your CPA is good advice.
 
   / Tax write-off questions???? #8  
If you don't use the tractor in a business you can deduct the sales taxes if you itemize, if the sales taxes exceed your state income taxes. There is a formula that you use to determine the other sales taxes that you pay on small things. It is conceivable that this additional deduction could make you an itemizer.

If you used this in a business, you could deduct all costs associated with operating the tractor and depreciate the tractor.

If you use it part business, part personal you would likely need to apply the hobby loss rules which means that you can deduct the business portion of your expenses (as misc itemized deductions) up to your income from this activity in a very specific order. You need to keep a log book of the tractor activities. Since you don't itemize, this would likely have the perverse effect of including your hobby income, but allow you no deduction for expenses. These rules are very complex, you should read about them.

I am a CPA and CFP and former university tax professor (retired in May, 2008). I always use to tell people tha everyone would like to have uncle sam pay for a portion of their hobbies, but unfortunately he won't if you follow the rules correctly.

In your case, as described, you are likely to get no tax benefit from the tractor.

Steve
 
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   / Tax write-off questions???? #9  
I think no write off unless your tractor was purchased in support of an income producing operation. Or an operation that could conceivably produce income in the next several years.
Dave.

Google sect. 179 deductions. it's pretty broad if you have any kind of business at all set up.
 
   / Tax write-off questions???? #10  
I'm also interested in the responses on this topic
 
 
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