WITAXLADY Posted February 25, 2014 Report Share Posted February 25, 2014 so son purchases cows and buys in to father-in-laws farm. Now they ship cows - long term capital gain - and he owns/receives 34% of sale but wait some of those are the purchased ones and some of those are the raised ones from the original cows She cannot seem to understand they are no longer all raised.. on the farm. What /how is the basis figured? I have always calculated by how many were raised at 0 basis and how many were purchased, farm wife says " he gets 34% - but of what cost?! Do you understand what I am asking? He doesn't even know how many were shipped... I cannot even say 14 at an average purchase price of $1500 and sold for $800 = huge loss when it might be 1/2 raised and no loss for those! help please - missing something? Thx Quote Link to comment Share on other sites More sharing options...
RitaB Posted February 25, 2014 Report Share Posted February 25, 2014 Alright, no, I don't understand, I'm pretty sure. I'm not getting enough ZZZZZ's, but why is shipping cattle a LT capital gain?I'll be honest, when I can't get farmers to keep up with whether Bessy was purchased or raised, I just keep depreciating all the purchased Bessies, and put all sales on the line for "raised". It works out in the end. To the extent farming income / loss ever works out. Cause you know they are deducting feed for the Bessies in the freezer and stuff like that. Quote Link to comment Share on other sites More sharing options...
glgcpa Posted February 25, 2014 Report Share Posted February 25, 2014 I'm not sure I can help with this, but I do a lot of beef farmers, and they all have sales tickets from the stockyards or cattle brokers(pinhookers to you old timers) and I make sure they bring them and go over them with the client and have them identify raised vs purchased. A lot of times you can identify the over 2 year animals by weight which is always on the tickets,at least in this area. Someone has the sales tickets and you need to get your hands on them. 1 Quote Link to comment Share on other sites More sharing options...
schirallicpa Posted February 25, 2014 Report Share Posted February 25, 2014 If they are in the business of raising and "shipping" out the cows to market, then that's business income, not capital gain. Capital gain comes into play when they are selling off dairy cows that they have had as an investment for their business (when they are going out of business) or sale of older beef cows that they have used to make babies for market. Cull cows. 2 Quote Link to comment Share on other sites More sharing options...
OldJack Posted February 25, 2014 Report Share Posted February 25, 2014 The 34% calculation should come after determining the gain on each animal. This sounds like a required partnership tax return whether they like it or not? 3 Quote Link to comment Share on other sites More sharing options...
WITAXLADY Posted March 2, 2014 Author Report Share Posted March 2, 2014 raised cows 4797 flows to LT capital gain does it not? Held longer than 24 months. less than are Sch F already a partnership but before the taxes - split everything 76/34 and then deal with it! It was fine for original when all was raised but now they all "own" all and the new ones are purchased as well - the original can say his are all raised if he wants but my farmer has basis...and I at least need to know how many were shipped. And no, farm wife won't release slips... Quote Link to comment Share on other sites More sharing options...
kcjenkins Posted March 2, 2014 Report Share Posted March 2, 2014 Tell her she can keep them, as long as she makes you copies. Or brings them by your office and you will scan them and give them right back. Or she can scan them and email you the scan. Quote Link to comment Share on other sites More sharing options...
RitaB Posted March 2, 2014 Report Share Posted March 2, 2014 raised cows 4797 flows to LT capital gain does it not? Held longer than 24 months. less than are Sch F You are right, I was just thinking about selling calves less than a year old. Gotcha. "Wife won't release slips" - sounds like you got yourself a doozy there. Quote Link to comment Share on other sites More sharing options...
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