12/ ...bc that's the obvious hack, right? * lose $30k * lose $30k * lose $30k * sell 1 bale of hay for $5 ; no expenses * lose $30k ...
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Replying to @MorlockP
13/ I'm sure that the IRS also has good info on what things cost, so I'd never claim a Kubota cost $100k or a shovel cost $500.
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Replying to @MorlockP
14/ To be super-safe, I keep ALL receipts, and when I fill in form F I reference * date * vendor * receipt # * EXACT total
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Replying to @MorlockP
15/ if I'm ever audited, I've got a folder w all of this. The very very worst case is IRS says "oh, XYZ isn't actually allowed".
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Replying to @MorlockP
16/ e.g. "Oh, post hole diggers are deductable, but shovels aren't". And I'll respond. "Ah, I see, my bad. Here's the extra $100 I ower you"
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Replying to @MorlockP
17/ When dealing w the IRS there is a WORLD of difference between "reasonable disagreements over interpretation" and FRAUD.
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Replying to @MorlockP
18/ ...so I don't invent employees, expenses, or anything else. KEEP ALL RECEIPTS. EXAGGERATE NOTHING.
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Replying to @MorlockP
19/ Now, talk about depreciation IRL, things wear out. IRS has charts for this. Cars = 10 yrs (or whatever), PCs = 3 yrs (or whatever), etc
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Replying to @MorlockP
20/ In general, if you buy a $20M asphalt plant, you get to write it down on your taxes on a straight line depreciation over X years.
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Replying to @MorlockP
21/ ...but that's a huge hassle when you buy a $12 shovel and write it off 90 cents per year. So there are exceptions for rapid / lump sum
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22/ You want to do this for two reasons: (a) much less hassle (b) time value of money: better to save on taxes today than in 12 yrs
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Replying to @MorlockP
23/ There are two exceptions the IRS lets you use to accelerate depreciation: (a) farm startup costs (b) small amounts
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Replying to @MorlockP
24/ farm startup costs include: * research a priori * buying farm * buying equipment (e.g. tractor, greenhouse, etc.)
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