Wondering about the importance of your cattle records to the IRS? John Alan Cohan explains that the IRS is continuing to take a closer look at farm records, and even your management practices as they relate to expenses. For example, Cohan says
“The IRS also may inquire about animals that are not productive or which are not being used for breeding, showing or racing purposes. For example, if an animal has become ill and has incurred significant veterinarian fees, the question is whether this animal is going to be laid up for a long time, and whether it might be prudent to sell the animal or donate it to a school or other equine charity. By doing so, you are showing that you are mindful of the costs of keeping an animal that might not be productive, and that you are reducing your costs by culling the animal from your inventory.”
Having organized cattle records can help show your intention to run your ranch as a business. In addition, good record keeping can help you see which cows are not being as productive and ones you may want to consider culling.
Read the full article “Accuracy of Records is Important to IRS”
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