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John Alan Cohan, Contributing Columnist

Livestock Industry Opinions
Jun 10, 2016
In a remarkable decision, the Seventh Circuit Court of Appeals reversed a Tax Court opinion dealing with a Thoroughbred racehorse owner’s activities. This case is important to the livestock industry because IRS hobby loss regulations, the subject of the opinion, apply to livestock as well as horse activities.
Livestock Industry Opinions
Jan 22, 2016
For most people, their encounter with the IRS ends at the audit phase: Taxpayers will often agree to pay whatever the IRS says they owe. In situations where the auditor claims your ranch or farming activity is a hobby, not a business, this can have long-lasting and adverse consequences because deductions against outside income would be disallowed.



Livestock Industry Opinions
Nov 8, 2013
They just broke 2 pounds a day of average daily gain on grass and are heading to the feedlot at 940 pounds. The center had 102 yearling heifers last spring. After selecting 25 replacement heifers, 77 were spayed and sent to grass. Of the 25 replacement heifers, 19 were diagnosed as pregnant.
Livestock Industry Opinions
May 10, 2013
For many people in the horse or livestock business, the operations have a history of losses, but the expectation is that future operations will be profitable. The IRS will want to see evidence that the taxpayer has taken steps to correct or abandon unprofitable strategies, and to demonstrates steps taken to improve operations.
Livestock Industry Opinions
Mar 8, 2013
Some cases involve a combination of activities, such as Smith v. Commissioner, T.C. Memo 2007-368. This involved a cow and dairy farm, a cutting horse operation, and dog breeding. The court held that the cow and dairy farm was engaged in forprofit activities under the IRS hobby loss rules, but not the other activities.


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