Tax Option Letters Important to Ranchers
by: John Alan Cohan
Attorney at Law
Cattle Today
A great number of companies do not make a profit, but instead have operating losses for an extended period of years. Of companies that have decided to start selling stock to the public in initial public offerings (IPOs), about 75 percent of them have never made a profit. Their newly issued stock is being bought in droves–and is somewhat akin to buying lottery tickets, in my opinion.
Many people do not make a profit in their farming ventures — and the IRS is well aware of this fact. For most farmers and ranchers, the activity is not the taxpayers’ primary occupation. One Tax Court case said that it would be “foolish” for a taxpayer to give up other employment until he was sure he could support himself with the proceeds from farming or livestock.
The Beef Blog 