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LandsofAmerica.com Blog » Ranch Taxes - Can a Landowner Deduct If They Don't Materially Participate?

Ranch Taxes - Can a Landowner Deduct If They Don't Materially Participate?

Posted on: January 23, 2012 at: 7:39:41 PM by: Allen Shannon

We had a LandsofAmerica.com friend email us today about an IRS case that was taken to court over a land owner's participation coming into question regarding tax deductions:

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Losses not deductible where ranch owners didn't materially participate in ranch activities
The Tax Court disallowed losses incurred in a cattle ranch owned by taxpayers where they failed to provide evidence in support of their claim that they materially participated in the day-to-day management or operation of the ranch. In addition, the taxpayer's services performed in the management of the ranch activity were disregarded because of the presence of a full-time paid ranch manager who ran the day-to-day activities of the ranch. Iverson, TC Memo 2012-19

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You can read more about this case here: http://www.rothcpa.com/archives/007612.php

What are your thoughts on this?  Do you think it's fair to the land owner?  Give us your comments below....

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