Can you write off Bee loses from the winter

[AramF]

If he claims bees as his assets, then he can fully depreciate them when he looses them. But I bet he treats them as simple expense, thus he writes off his purchase price the moment he buys them, kind of like hives, sugar, feeders etc.

His loses sort of come in the form of income that he cannot realize. So he bought the nucs for $120 but they all died so he did not make any honey and could not sell any honey. So he has -$120 net income. If the bees did not die, then he'd maybe have $300 worth of honey sales. In that case he'd have net income of $180 on which he'd pay taxes in schedule C.

On the side note, you can expense for tax purposes most all of your assets the year you buy them. Why anyone would care to depreciate them over several years and add hassle to their life is something i do not know. If you have another job, losses from bee business will simply decrease your tax liability from that job's income.

You are trying to write off possible income. That simply does not happen with IRS. It can be done with insurance claims, but not with IRS.

[Seymore]

As a landlord, I cannot write off unrealized income when my house sits empty. It is simply income I did not make.

If a cow dies, you cannot deduct the cost of the cow, if you have already deducted the cost of the cow when purchased.

When a piece of furniture breaks at my store, I am out the cost of that piece of furniture, or rather the income from sale of it. The COST of the item is expensed at time of purchase.

In an ice storm on a tree farm, ruined trees are simply ruined trees. No deductions for ruined trees.

Same with bees. Sorta depends on when you bought them relative to the tax year. The IRS doesn't care about income you almost made, but by the same token, they don't tax you on potential income eiher. (give them time! And the IRS never, ever allows double dipping. You can, however, fully expense any remaining undepreciated cost on a depreciable item that goes out of service.

[bwhitecpa]

Casualty Loss. Form 4684, page 2, section B.

[Oldtimer]

He didn't actually lose the money so nothing to write off. If he buys replacement bees that's real money he can claim it. If he makes less income next year because of it he'll pay less tax because of it.

He may be claiming annual depreciation on equipment so if any of that was damaged as a consequence the remaining book value could be claimed. But the actual bees in a hive do not normally have a book value.

Other than that, so far, no cost in dollars, no write off.

[jim lyon]

Perhaps it should be looked at from another angle. The IRS is giving you a break (did I really just state that?) by allowing you to take a one year write off on a bee purchase and not making you amortize it over a longer time. I believe that a purchase of a stock cow would require you to put it on a depreciation schedule over the expected calving life of the animal. In this scenario, of course, the earlier death of the animal would allow you to complete the write off.

[sqkcrk]

But what is the "expected" life of a colony of bees?

I see no credible way to account for dead colonies of bees. If writing off dead colonies were allowed there would be alot more dead colonies each year. Thhe only way I can see to account for dead colonies is w/ the receipt of purchase of packages or nucs and queens.

[bwhitecpa]

Business Casualty Loss: http://www.irs.gov/pub/irs-pdf/p584b.pdf

Basis of Assets: http://www.irs.gov/pub/irs-pdf/p551.pdf

I'm not trying to solicit business nor do I know the entire facts and circumstances regarding your situation NOR am I rendering an opinion as to how this should be treated. This is merely guidance as to how I would approach the research of the matter.

I just know the beekeeper in this siuation sustained a substantial economic loss, and I would explore every venue before dishing out a verdict on whether you can claim an income tax benefit on the loss of the hives. Are the hives lost a business expense? I would venture to say "no." Was it a casualty loss? "Maybe."

Maybe request a Determination Letter from the IRS would clarify for us?

Ok, back to billable work!

[valleyman]

Beekeeping is no differient than any other business that you may invest money in.

If he went into beekeeping to make a profit, and now intends to quit then yes he can deduct everything that he spent.

If he intends to stay in the business then he might want to set up his investment on depreciation. Yearly depreciation may be taken as an expense up to a set amount that changes almost yearly.

Still if he is staying in the business he can deduct the expense of replacing the bees that he lost.

The only catch is that he must show a profit every 3-5 years, I'm not sure about the time frame this current tax year.

The other good thing is if he reinvests every year the profits from the past year he never has to hypothetically pay taxes on a profit.

Don't believe any thing else, and if your tax accountant tells you any differient go to one that knows how to file farm/business forms.

If he's in it just for fun then he needs to forget it. But with 20+ hives it surely is a business.

[valleyman]

I saw a post about writing off a dead cow.

If you purchased the cow yes you can write off the cost of purchase minus what you may have depreciated her.

If you raised her no because you have already deducted the cost of raising her, or should have at least.

Tax School Closed!!

[sqkcrk]

20 hives does not a Business make.

[AramF]

>>>The only catch is that he must show a profit every 3-5 years, I'm not sure about the time frame this current tax year.


The only catch is that you have to show that you are actively TRYING TO MAKE PROFIT. Amazon.com lost money for 10 years, nooone questions that they are business. That "profit year" test is a common misconception. Most of the farms that have a little extra money can afford to buy more equipment, so they will be showing loss or breakeven on many occasions.

[valleyman]

20 hives does not a Business make.

Respectfully, I disagree. Point being, If he makes $1000.00 profit off of those 20 hives and he gets audited, the IRS will check his bank account and he WILL pay taxes on those PROFITS. It does happen. One of the first things the IRS looks for is deposits out of the ordinary.

[johng]

At what point would it become a bus? 20 hives with associated equipment would easily add up to several thousand dollars. Everyone has to start with something. It would be hard for a new beek to buy a couple hundred hives to start with. You have to see if you can even keep bees alive before you grow.

[Mike Snodgrass]

I just found out i cant write off beekeeping expenditures from last year as well!!! I didnt sell a dimes worth of honey last year and i wont this year either!!!!!!

[Seymore]

It's been a while since I studied up on tax stuff, but what makes something a business is often "intent." I decide to go into a beekeeping business (try to earn $$ from my efforts), so I jump thru the hoops, get my license from the city, register my name, etc. Whether I make a profit is often irrelevant, but of course the IRS will stare closely at you if you file year after year showing loss after loss. A truck farmer from Slarita Farms selling potatoes off his truck or at the local farmers market, is indeed in a business, according to the IRS, even though it may seem like "small potatoes" to Green Giant. And many hobbies do transition into businesses. You can't keep a hobby a hobby forever, if it makes a certain amount of money regularly. Can't remember the rules, but it's pretty clear if you just visit IRS.gov.

[valleyman]

I just found out i cant write off beekeeping expenditures from last year as well!!! I didnt sell a dimes worth of honey last year and i wont this year either!!!!!!

I would strongly suggest you find another tax preparer. Sounds like something H&R Block and other national preparers will tell you. They will take the easy and sure way. Find an independent preparer that does farm and business.

[mbcpa]

You can't double dip.

If he paid to purchase the bees, he should have deducted the purchase price. He can't take another deduction for the same bees.

Also, the definition of a casualty loss is something that is sudden, unexpected, or unusual. I'm not sure this would qualify.

[Bud Dingler]

Maybe he wants to look into insurance on his colonies?

A quart jar with a measuring cup and some windshield wash fluid and directions how to do mite testing mite bee cheaper and more effective in the end!

[mbcpa]

I just found out i cant write off beekeeping expenditures from last year as well!!! I didnt sell a dimes worth of honey last year and i wont this year either!!!!!!

Whoever is telling you this is most likely wrong.