Tax Deductions for Cattle Breeding

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Cattle ranchers can deduct breeding expenses to lower their tax liability.
Cattle ranchers can deduct breeding expenses to lower their tax liability.

Cattle breeding is a labor-intensive endeavor that requires heavy time and asset commitments from the cattle owner. The IRS understands that cattle breeders operate on a slim profit margin, and need every break they can get when it comes to paying taxes. Subsequently, breeders can find a range of deductions, from travel expenses to cattle feed.

  1. Rent

    • The IRS allows cattle breeders who raise livestock in rented or leased facilities to deduct the total cost of rent for the year on their taxes. For example, if you lease a barn from a landlord at $1,000 per month for the facilities, you would deduct $12,000 in rental expenses from your taxes on your Schedule F tax form. You cannot deduct rental payments on your taxes if you have a "rent-to-own" agreement with the landlord.

    Labor

    • If you own a cattle-breeding operation that employs workers on a temporary, contract or full-time basis, the IRS allows you to deduct their wages from your income taxes. The manner in which your pay your workers does not matter; if you pay workers in cash, you can still deduct the cash payment from your income taxes. Additionally, any money you pay to house your workers is tax deductible. For example, if you feed your workers three times a day and give them a room in which to live, you would calculate the approximate cost over the tax year.

    Feed

    • Cattle breeders can deduct the feed they give to their cattle during the year in which the cattle consumes the feed. If you buy cattle feed on the first day of your fiscal year, the cattle must consume that feed before the last day of your fiscal year if you plan to deduct the feed expense on your taxes. Additionally, cattle breeders cannot buy feed purely for the reduction in tax liabilities. For instance, if a breeder buys feed that cattle will not consume for another year, the breeder cannot deduct that feed expense from his taxes.

    Travel

    • Cattle breeders travel to maintain and grow their business, attending trade shows, livestock auctions and veterinary clinics. Travel expenses are tax deductible. For example, if a cattle breeder attends a livestock auction in Dallas, Texas -- hundreds of miles from his home -- he can deduct the gas or the airplane ticket he used to travel. Additionally, money the breeder spent on meals and accommodation per day is tax deductible.

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  • Photo Credit David De Lossy/Valueline/Getty Images

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