Edsel Posted November 28, 2019 Report Share Posted November 28, 2019 I have posted before about a huge farm loss disallowed as a hobby. I don't have any heartburn about the disallowance. For some reason the IRS left a little bit of the huge loss (some $15K) as allowed, and I don't know why as I didn't prepare the return. However, in the year following the disallowance, there would have been $21K in depreciation. Is there anything that can be done with the depreciation or the assets to which it applies? The assets were not disposed for another 3 years. Quote Link to comment Share on other sites More sharing options...
Max W Posted November 28, 2019 Report Share Posted November 28, 2019 Someone at the IRS had indigestion eating too much turkey, including the leftovers and overlooked the depreciation. If the business was disallowed, so too should the depreciation have been disallowed., as well as the leftover. At times, the IRS seems to have trouble with depreciation and I have run into a few cases where they messed things up. Happy Thanksgiving! 1 Quote Link to comment Share on other sites More sharing options...
DANRVAN Posted December 2, 2019 Report Share Posted December 2, 2019 On 11/28/2019 at 8:59 AM, Edsel said: a huge farm loss disallowed as a hobby On 11/28/2019 at 8:59 AM, Edsel said: (some $15K) as allowed, and I don't know why as I didn't prepare the return was that allowed on Schedule A or C? Quote Link to comment Share on other sites More sharing options...
DANRVAN Posted December 2, 2019 Report Share Posted December 2, 2019 7 hours ago, DANRVAN said: was that allowed on Schedule A or C? Meant to say F instead of C. Quote Link to comment Share on other sites More sharing options...
DANRVAN Posted December 2, 2019 Report Share Posted December 2, 2019 On 11/28/2019 at 8:59 AM, Edsel said: For some reason the IRS left a little bit of the huge loss (some $15K) as allowed They allowed some of the loss? Then sounds like IRS decided he was in the business of farming, but disallowed some of the deductions as not ordinary or necessary; or as unsubstantiated. Disregard my reference to Schedule A above if he was allowed to report a loss. 2 Quote Link to comment Share on other sites More sharing options...
Edsel Posted December 5, 2019 Author Report Share Posted December 5, 2019 Can't really answer the question as to what they allowed or why. Apparently it is Sch F. As I didn't prepare the return, my information can only come from their response to the 4506-T. The farm persisted for a couple more years that I will have to file, so I would like to deduct something if I can. There is book value left in undepreciated assets, and if the depreciation cannot be allowed, I'm wondering about a 4797 loss when the equipment is disposed. Thanks for your responses DANRVAN. Quote Link to comment Share on other sites More sharing options...
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