Posted on 11/15/2006 5:02:46 AM PST by TheTruthAintPretty
Ping.
Interesting....
This horse owner needs to become a black race baiting preacher. The IRS never investigates them, not even when they pay for their illigitimate children with funds meant for other purposes.
If that doesnt work he could become a Politician-Land speculator like Reid or Pelosi. Millions top be made and never an investigation.
Proving once again the truth that the power to tax is the power to destroy. I have no horse in this particular race, but guess what folks - you're next.
The IRS needs to go. The government wouldn't have any need for so much money if it got its fingers out of all the ings that didn't concern it, like: education, welfare, TAXING people; three of the biggest money suckng black holes around.
The Justice Dept. has to do something to justify its budget. It certainly doesn't intend to investigate Harry Reid's shady land deals or Nancy Pelosi's illegal alien workforce at her Napa Valley vineyards. No, they want the easy pickings of horse owners to harrass, because the horse owners aren't in charge of the Justice Department's budget for the next fiscal year. The entire government is reaching the tipping point. Read Dr. Seuss's "Yertle, the Turtle" for a prediction of things to come.
We live in horse country (Aiken, SC) and the town has become the Polo mecca of the world; I'm e-mailing this around to some friends who are in the business and recommending they send the article to their accountants.
ings=things
FReeping this early doesn't work well; the brain needs to be turned on.
Ping
Musta' missed something. Now you're startin' to lead me to think they can be eaten.
The IRS does not look kindly at business that constantly lose money. My guess is the audited person was treating a hobby as a business to cut his taxes. Do it for several years and the IRS will audit you.
I don't know about cute, but they are noble, an important part of humanity's past, and a critical part of our national security.
Heaven forbid, but someday, whether due to terrorist action or natural disaster, we may be, if even temporarily, back in the horse and buggy days. If we are, we better have some horses.
We used to live in horse country in Michigan. Our neighbors were "hobby Farmers" and many had horses for their own pleasure But you could take it off your income tax if you could show "a business". I don't remember the rules but you could show a loss for 3 years or maybe 4 in a row but the next year you had to show a profit-and your were ok with the IRS. Essentially they had tax right-offs for their pets-which are very expensive to be sure.Sounds to me like the IRS is getting more specific with this industry because they know all kinds of corners are cut in this business.
Cordio
Keep a horse if you like. But don't expect me to subsidize it via tax credits. Do so, and expect an IRS audit.
When horses are pets/hobbies for rich people, they should not have any more right to write off their hobby than anyone else does.
I don't think they are talking about pet horses. What they are talking about specifically is active owners in the business of breeding and racing horses. There are specific rules covering the intent and amount of participation involved, and the IRS appears to be ignoring those rules.
[snip]
As Gillman explained through his fictional alter ego, Steve Shades, C.P.A., in the November 11 issue, the IRS formerly looked at horse-related deductions progressively to determine if they indeed fit the definition of a business. First, the expenses had to be relevant to the horse business. That was the first test.
The second test was the hobby rule. You had to conduct the business with the intention of making a profit, with a business plan and strategy for profit, if not profit itself.
Third was material participation, also known as active participation. You had to materially participate in the business to deduct your horse-business losses against current income. If you did not pass the material-participation test, you were regarded as a passive investor and could deduct your losses only when the business was liquidated.
It seems that the third test of a business, the passive-loss issue, has moved to the top of the IRS list, and the presumption appears to be against the horse owner.
Admittedly, just sitting at a desk and poring over financial records from the horse business is not enough. This is the mark of an investor. But legitimate owners who play by the rules are now taking a whack from the IRS, in an assault on both their wallets and their integrity.
[snip]
With the Democrats coming back into power, how many MORE enterprises will become "hobbies"?
Do away with the IRS. It is but a method of the Communists to destroy America as we know it.
The IRS is but Nazi Germany's Gestapo in America.
Most of those people are not "in business" unless they can show some real income.
We event horses and don't have to worry about an audit because there is little money in eventing and so can't claim to be other than a hobby :) just the adrenaline rush is reward enough, some days.
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