Discussion:Dog Breeding

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Discussion Forum Index --> Tax Questions --> Dog Breeding


Mtmckeecpa (talk|edits) said:

26 May 2006
(1) I can't seem to find an asset class code to depreciate a breeding female dog. I see class lives for hogs, cattle, sheep, etc... but not dogs. Any thoughts?

(2) TP specifically purchased a female dog in '05 for breeding . However, the dog will not be specifically ready to breed until last quarter of '06. Will the female dog qualify for a 179 deduction in '05? I don't believe so because of reg 179-3(d)(definition of placed in service). Any different thoughts?

Thanks.

Dennis (talk|edits) said:

26 May 2006
unspecified breeding stock defaults to 7/12. Only citation I saw was ratites.

Mtmckeecpa (talk|edits) said:

26 May 2006
Thank you.

Any thoughts/comments on question 2 about whether the female breeding dog would qualify for 179 in 05 even if the breeding activity did not start until 2nd half of 06? Dog was specifically purchased for breeding... I think no 179 in 05...because the intended use of the dog does not start until 06...

Solomon (talk|edits) said:

26 May 2006
Discussion:Do you depreciate animals kept for breeding business?

Mtmckeecpa (talk|edits) said:

26 May 2006
Solomon,

Thanks.

So, based on that thread...no 179 in 05 since the breeding dog is not "placed in service" until 06

Warren (talk|edits) said:

26 May 2006
And it does look like MACRS 7 year is the method for dogs used for breeding. It seems ridiculous that a cow is MACRS 5 year and a dog is MACRS 7 year life. The actual breeding life of a cow is 12+ years and the breeding life of a dog is generally less than 7 years depending on the breed.

Sw (talk|edits) said:

26 May 2006
If it's a dairy cow I doubt very seriously you would get 12+ years. Beef cattle probably.

Meadowglenatmonroe@frontiernet.net (talk|edits) said:

30 May 2006
Tuesday, May 30, 2006

Greetings to all.

Assuming the female dog is utilized as an investment or within a business, for the purpose of selling puppies for a profit, then the female dog is a business asset. The cost of the dog should be depreciated over the number of years that a female dog can have puppies. I don't know what this time frame is. However, if there is any personal element in utilizing the female dog, such as taking morning jogs with her or having the kids play with her in the evenings, then the total cost of the female dog is not all business. A personal element must reduce the total business cost of the dog, and also the amount depreciated. How do you compute the personal element of a female dog, in terms of cost? I have no idea.

The female dog was purchased in 2005. The dog is placed into service on the date of purchase. It does not matter that the female dog will not have puppies until the last half or last quarter of 2006. The female dog is ready, and completed, and is placed into service on the date of purchase, even if the female dog is not utilized at that point.

Therefore, you can elect a Section 179 deduction for 2005 on this female dog, as well as its first year of depreciation, if the total cost of the female dog is more than the allowable Section 179 deduction.

Mtmckeecpa (talk|edits) said:

30 May 2006
Angelo,

I take a more narrow view based on Reg 1.46-3(d). The female dog was purchased specifically for breeding and there was no breeding activity in 05, I don't think 179 is available.

Mtmckeecpa (talk|edits) said:

16 June 2006
IRS Publication 225, Farmer's Tax Guide

Immature livestock.

Depreciation for livestock begins when the livestock reaches the age of maturity. If you acquire immature livestock for draft, dairy, or breeding purposes, your depreciation begins when the livestock reach the age when they can be worked, milked, or bred. When this occurs, your basis for depreciation is your initial cost for the immature livestock.

DZCPA (talk|edits) said:

16 June 2006
How much does a dog cost? Expense it all at once. Why depreciate assets under $1000? Never heard the IRS attacking assets under this amount.

Mtmckeecpa (talk|edits) said:

16 June 2006
$13,000.00

Warren (talk|edits) said:

16 June 2006
It is unbelieveable what the champion breed dogs sell for. I have a dog breeder client that buys breeding stock for around $10,000 and will sell a puppy for $1,500 to $3,000.

Mtmckeecpa (talk|edits) said:

16 June 2006
The pups will go for $1,200 - $1,500

Warren (talk|edits) said:

16 June 2006
Mtmckeecpa - Just curious....does your client make any money in the breeding business? My client has a net loss during the 10 years that they've been doing it. He shows a profit about every other year but the losses are larger than the income. He has three breeding females or bitches as he calls them (I know that's the technical term but I have trouble keeping a straight face when he uses the word bitch about a dozen times during a tax appointment.) But he only breeds each female every 2 years so he'll get one litter one year and two litters the following year. He shows the females at shows to get their credentials as champions so they can't be pregnant all of the time.

Mtmckeecpa (talk|edits) said:

16 June 2006
Warren,

Client started last year (04) and showed a loss of about $8k.

This year they will show a profit but not from the breeding of dogs per se but from a legal settlement stemming from the breeding business.

The above profit does not include the breeding dog cost of $13k.

Do you take the 179 or depreciate? My client says that other breeders depreciate vs 179

Warren (talk|edits) said:

16 June 2006
We depreciate mainly because the income isn't there to use Sec 179.

DZCPA (talk|edits) said:

16 June 2006
You can take section 179 deduction if Schedule C has a loss and there are W-2 wages.

Warren (talk|edits) said:

19 June 2006
My client started the breeding business when he retired so there are no W-2 wages.

Ajdachshund (talk|edits) said:

9 February 2007
Does anybody know where veterinarian charges for a dog breeding business would fall under "Contract Labor Expenses"? I don't know where to put these and of course there is no information anywhere on dog breeding with respect to taxes.

Also, I am kinda winging it, This is my first year doing taxes for my new business for dog breeding. I had regular W-2 wages for the year and am showing a loss on schedule C, so am I ok doing a 179 deduction on my dogs? I didnt understand the "placed in service" because some of my dogs are still puppies and are at breeding age yet, while someone said "date in service" is the date you purchased them....Or would it be better to do a regular depreciation?

Thanks!!

spam deleted

Illini (talk|edits) said:

8 June 2011
dachshund -- you need to check IRS Rev Procedures for the weiner allowance -- you can claim anything you want for 48 hours, but all bets are off after that.

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