>>An enterprise that loses money year after year and still keeps at it is
>>obviously a hobby<<
This statement is not valid. An enterprise that continues to reinvest
capital each year under various IRS incentives such as section 179
depreciation for certain new purchases (such as bees, beehives, trucks,
equipment) can continue to create legal artificial losses to offset taxable
income. In theory you can have a loss your whole life with an ever
expanding business. Laws are passed to give businesses incentives to
stimulate the economy in the direction the government wants the economy to
go. There was a time when we were given tax credits for hiring certain
sectors of the unemployed as a business incentive.
How many ranchers have losses for years when the weather turns against them.
There are rules and regulations that allow for carrying forward and
backwards these losses.
There is also the property tax exemption factor. Bees are considered
livestock in the eyes of each state. These states have instructed the
property tax assessors of each county, through state property tax laws to
grant tax exemptions to land owners who meet state guidelines. Though an
agricultural venture may loose money each year there may be other factors
that will keep it operating that an observer may not see.
Just as we feed our hives in the hope of the next nectar flow, there are
those who are building operations for future profits. As an example: I
have a relative who started with very little money and then continued to
loose money for over seven years building up a laundry business. He hardly
could pay his personal bills, scraping and borrowing money wherever he
could. He sold his business and netted $7,000,000
----- Original Message -----
From: "Randall Austin" <[log in to unmask]>
To: <[log in to unmask]>
Sent: Wednesday, November 13, 2013 4:49 PM
Subject: [BEE-L] hobby income
>>> Which means that the taxman will subsidise hobby beekeeping by accepting
>>> a
>> loss each year. Quite right, as hobbyists' small apiaries are widely
>> distributed , not concentrated like industrial beekeeping operations, so
>> the
>> countrywide network of hobbyists pollinate gardens, smallholdings, wild
>> flowers and benefit the general environment.
>>
>> Have you checked that with HMRC? I was not aware that they were willing
>> to
>> subsidise any hobbies.
>
> The same applies in the US. You cannot deduct losses from hobbies
> (legally, anyway). An enterprise that loses money year after year and
> still keeps at it is obviously a hobby. If people are getting away with
> deducting hobby losses, it is because nobody has turned them in to the IRS
> yet.
>
> Randall Austin
>
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