jainen Posted March 28, 2013 Report Share Posted March 28, 2013 A new Tax Court ruling focused on lack of a business plan. TC Memo 2013-76 "Lack of profit objective was shown by overall evidence, including that taxpayer didn't carry on activity in businesslike manner in that, although he advertised horses and attended horse shows, he didn't have business plan that went beyond more than generalized goals, didn't maintain budget or make financial projections, commingled activity and personal finances, and didn't loss-controlling measures or show if he investigated potential profitability of his strategy of switching stallions in certain years. It was also telling that he used activity losses to offset significant income from his accounting firm. Arguments that lack of profits was due to factors beyond taxpayer's control and that he was still in startup stage because he switched type of horses he was trying to breed were unpersuasive." Quote Link to comment Share on other sites More sharing options...
OldJack Posted March 28, 2013 Report Share Posted March 28, 2013 And this guy had an accounting firm? He probably represented himself? Like the old saying that a mechanic's car doesn't run well. Quote Link to comment Share on other sites More sharing options...
jainen Posted March 28, 2013 Author Report Share Posted March 28, 2013 >>represented himself?<< No, he had two lawyers. But he did his own taxes, with a masters degree in business taxation and a quarter million dollar solo tax practice. But he was raised on a dairy, so he bought a ranch and some Morgans and proceeded to claim losses for 16 years totaling one and a half million. Personally I found his business efforts to be fairly substantial compared to a lot of my clients. Interesting read. Quote Link to comment Share on other sites More sharing options...
kcjenkins Posted March 28, 2013 Report Share Posted March 28, 2013 No "business plan" could out-weigh 16 years of losses, IMHO. Reminds me of the old saying "pigs get fed, hogs get slaughtered". Quote Link to comment Share on other sites More sharing options...
Elrod Posted March 28, 2013 Report Share Posted March 28, 2013 Does that mean my gold fish and guppies ain't deductible?....Boy am I up a tree. Quote Link to comment Share on other sites More sharing options...
kcjenkins Posted March 28, 2013 Report Share Posted March 28, 2013 Hey, they MIGHT be. Are they part of your "office decor"? Then they could be 'office supplies'. 1 Quote Link to comment Share on other sites More sharing options...
Elrod Posted March 28, 2013 Report Share Posted March 28, 2013 Hey....Thanks KC... Quote Link to comment Share on other sites More sharing options...
Lion EA Posted March 29, 2013 Report Share Posted March 29, 2013 Watch fish? Guard guppies? Maybe a piranha? Quote Link to comment Share on other sites More sharing options...
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