Beekeeping and taxes

[Gypsi]

Not exactly marketing - but this is the business side of beekeeping.
I poured quite a bit of money into this hobby, with the intent of learning it, doing swarm removals and cut outs, (and swarm removals /easy cutouts are already on my website).
I have 2 empty deeps and a nuc, plus other "homemade" woodware that may or may not ever hold a frame. I have a suit, and tools, and stuff. All of my bees are dead.

The fence I will end up depreciating over a 10 year period. How about the other stuff, how do you expense it on your taxes?

Gypsi

[beeG]

sorry your bees are dead

[Gypsi]

The feral bees that killed them have taken over pollination. It's ok.

[beemandan]

I poured quite a bit of money into this hobby,
How about the other stuff, how do you expense it on your taxes?

If it is a hobby, I expect that you can't write any of it off.
I think you should consult a pro.

[Gypsi]

It wasn't intended to be a hobby when I invested the money. I run a fishkeeping business, this is an adjunct...

[Duboisi]

Dont know how it's in the states. But over here it has to be big enough to be expected to substain a surplus. The number of hives can vary some(somewhere between 10 and 25 I think).

If you can give a simple calculation that shows that it will have a surplus(unless something unexpected occurs), you can file for taxes.

At the other hand, you may get penalty tax if you go from beeing a hobbyist to a sideline operation that generates too much surplus without reporting it and gets discovered.

It is important to keep all the receipts if you are to small now, but might expand. In that case you can backfile your earlier expenses. Myself I put them in a little box, just in case.:-)

BTW: Here in norway, you can have a surplus of about $700/yr on a hobby without having to file it, and you can do the same for several hobbies as long as they are not directly related to your dayjob. If it's less than about $9000/yr, you don't have to/cannot do VAT.

[sqkcrk]

It wasn't intended to be a hobby when I invested the money. I run a fishkeeping business, this is an adjunct...

If you already run a business, and if you consider what you have spent on bees and beekeeping equipment business expenses, then claim those expenses just as you would any other. Those pieces of equipment which will last a long time, such as supers, can be depreciated.

From what you have described, I would claim the expenses all on this years Profit and Loss Statement. I don't see any advantage to depreciating such a small number of items. Especially if you are not going to get bees again next year. As you stated elsewhere.

I am not a CPA, I'm just telling you what I think I would do were I in your shoes.

Also, you keep writing about feral honeybees as if you know where they are coming from and that they aren't coming from someone elses managed colonies. I don't know why you identify them as ferals and not just bees. But I'm funny that way.

[John_H]

I agree with sqkcrk. Don't look it as starting a new business, rather and expansion of your ongoing agriculture business. Not sure about the fence, but everything else I would write off as current year expense, not as a capital asset. I haven't followed recent tax law changes closely, but I think the Section 179 deduction now allows up to (and maybe over) $500,000 in current year investment in new or used equipment to be expensed in the year of aquisition. Sec 179 has been around a long time. I remember when the limit was $5,000. It's been expanded to encourage new investment in our current economic mess. Beyond all that, the reality is that the IRS has been cut back like all of government and your chance of getting audited is almost nill unless you claim something outrageous or don't report accurately something their computers can verify from an independant source like W2 wages or mortagage interest. Whatever you do, don't under-report income. They still put people in jail for that. You'll just pay interest and penalties for disagreements about allowable expenses.