Combining a non-farm business w/farming bus. /IRS

ejb · May 3, 2005

Anyone happen to know if its possible to own a single combined business (a corp in my case) that has both a farming and non-farming operation...as far as the IRS is concerned?

I own a small corp that is profitable and has nothing to do with farming...I also own a farm (not a hobby, but none-the-less is not nearly as profitable)...for simplicity, I'd like to only have to file a single 1120 (corp tax return) that has both farming and non-farming income/expenses/deductions etc.

Anyone know how this is handled as far as the IRS is concerned? would I need to keep two sets of books etc?

Indydirtfarmer · May 3, 2005

I work a Salary job as an employee of someone else, have a 1400 acre farming operation, and own 2 seperate small business's of my own.

A nickels worth of free advice....? Keep 'em seperated in any way possible. That will protect you in so many ways, should something unforseen occur.

One of my business ventures is a small operation where we have 2 or 3 tractors bush hogging commercial real estate, and also mowing pastures on various horse farms. It is incorperated seperately, and ran totally independent of my farm. Should someone get injured as a result of an accident involving a bush hog throwing something, my farm won't be part of the settlement of a lawsuit.....

It's just not a good practice in this day and age to combine several business ventures under one roof....

I'm reasonably certain an accountant would be able to explain the various problems accosiated with combining a (hobby OR for profit)farm in a tax situation....

Indydirtfarmer · May 3, 2005

That'd be associated..... Geez, who taught me to spell???? (apparently, no one....)

Unclebuck257 · May 3, 2005

What Indydirtfarmer has stated is the truth COMPLETELY!! On the liability side, that corp vail, as it's called, protects you pretty good from catastrophic liability verdicts hitting you, and on the IRS side, that's a whole new monster.

I could try and combine my corps, one farming/ranching and one totally unrelated, but my accountant tells me that the IRS looks at farming/ranching REAL HARD, because of the losses allowed and that could be taken. If you're NOT farming or ranching as your primary business, keep it seperate and give yourself that peace of mind. Believe me, and I speak from experience, those IRS boys are no fun to party and dance with, AT ALL!!!