Sometimes a farm, livestock or horse activity may be closely connected to one’s principal occupation, with certain tax advantages. If two activities are treated as one, deductions and income from each activity can be aggregated in deciding whether the taxpayer has the...

Otis and Alma Jordan of Amissville, Virginia persuaded the Tax Court that their horse racing and breeding activity was engaged in for profit. The couple lived on a 20-acre farm on which they constructed a new barn and made other significant improvements. They owned several...

Often enough the IRS will “trick” taxpayers by questioning whether they satisfy the Material Participation Test. This happens if the IRS concedes that your farm, livestock or horse activity is conducted for profit under the hobby loss rule. That in itself is usually a big...

Under the IRS hobby loss rule if you have losses in connection with any farming activity, horses, livestock or crops, the IRS may suspect that the activity is engaged in as a hobby rather than a business, particularly if there is a history of losses. One of the elements in...