Business-Like Approach Prevents Hobby Loss Audits

Business-Like Approach Prevents Hobby Loss Audits

John Alan Cohan, Attorney at Law

Cattle Today

In hobby loss audits, the IRS sometimes views various types of ranching activities as a means of generating tax losses, rather than a profit-oriented venture. Many cases that have ruled in favor of the taxpayer in livestock activities involve people who developed a superior line of animal. Taking a scientific approach to breeding is evidence showing a businesslike approach to the activity.

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