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Old 09-18-2015, 09:35 AM
 
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I know it varies greatly from state to state.
But there should be some general regulations too.
What does it take to claim property as farm. Mostly for tax breaks, of course.
Property in Q is 1 acre, or what they call around here, King County WA, a horse acre (you can keep a horse on it) in rural area located between 2 small townships. Property already has livestock and growing. Livestock, not property.
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Old 09-18-2015, 09:45 AM
 
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What you are describing sounds like a hobby, not a farm. Thus no tax breaks.
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Old 09-18-2015, 10:30 AM
 
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Quote:
Originally Posted by ukrkoz View Post
I know it varies greatly from state to state.
But there should be some general regulations too.
What does it take to claim property as farm. Mostly for tax breaks, of course.
Property in Q is 1 acre, or what they call around here, King County WA, a horse acre (you can keep a horse on it) in rural area located between 2 small townships. Property already has livestock and growing. Livestock, not property.
I dont know about other areas, but in Texas there are two main types of exemptions.

1) Ag Exemption - NEVER applies to improvements such as barns/houses....an Ag Exemption is a 98% exemption from appraised value of the property. To qualify, agriculture (or forestry) must be your PRIMARY occupation and primary source of income.

2) Open Space 1-D-1 exemption - is much more common and has minimum sizes in excess of 1 acre. For an open space exemption, the property must be used in agriculture for 3 of the last 5 years. Use is forestry, crops, hay, grazing livestock, bees, or also any of the environmental programs like WRP, etc.

I think you will have a near impossible time getting an ag exemption or the open space equivalent in your state with only 1 acre.

Even if you are doing intense farming on that acre, its probably not enough to qualify.
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Old 09-18-2015, 10:35 AM
 
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There are no general countrywide regulations. The regulations will vary by town to town or if you are on county government, by county. You can usually look them up online and find out what is considered to be a farm. If not , just call the local zoning office.
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Old 09-18-2015, 11:42 AM
 
Location: North Idaho
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Two different types of farm taxes. A farm deferral for property taxes has to be properly zoned and produce more than a specified number of dollars in income every year. You'll have to check with your own county to learn the requirements. I seriously doubt that a one acre hobby farm will qualify and the income requirement is usually pretty stiff and not possible to meet unless you are farming full time and are serious about making a living at it.

On your federal income taxes, you use schedule F to declare your income and expenses. You are expected to show a profit, I think k it might be two years out of every five, but double check that. The years with loss can be a good tax deduction.

On a one acre parcel, it is possible to turn a farm profit with concentrated farming, such as hydroponic marijuana farming. However, since marijuana is illegal in federal law, you might want to consult a tax specialist lawyer. Hydroponic culinary herbs might be less risk not to mention less of a target for robbery. A marijuana cart here in oregon just had an armed robbery, and I suspect multiple thousands of dollars of mj in a small area would be a tempting target.
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Old 09-18-2015, 12:18 PM
 
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Originally Posted by oregonwoodsmoke View Post

On your federal income taxes, you use schedule F to declare your income and expenses. You are expected to show a profit, I think k it might be two years out of every five, but double check that. The years with loss can be a good tax deduction.
Just finished a farm audit for Federal Income Taxes - There is not ANY rule at all that says you must ever make a profit...There is also no formal law that defines a farm as a hobby farm....You just must be engaged in the enterprise for the purpose of making a profit, regardless of whether you do or not.

HOWEVER, you will get audited per the guidelines (not law) if you claim farm deductions without showing a profit 3 out of every five years...There is no law, just internal guidelines....If you get audited they want to see 1) a business plan 2) records, 3) continuing education/changes based on success/failure 4) that you do not use farm assets for personal recreation, etc.

We bought 1000 acres to run cattle on in 2008...the business plan was a long term business plan b/c we have full time, non-farm jobs. We had planned on becoming profitable in year 4....we actually became profitable in year 3, but were audited end of year 4 after a big profit....the records/business plan, etc really saved us. Result was a no-change for income taxes.
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Old 09-18-2015, 06:51 PM
 
19,041 posts, read 27,607,234 times
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Thank you.
Two very valuable posts.
1. Yes, I read you have to "show intentions" of making profit. That's towards marksmu post.
2. property has to be zoned as such.
Which leads towards looking deeper into local regulations.
Thing is, we are fast and furious outgrowing our acre with "hobby" and would like to get more. Both in property AND in homesteading. But all those come with rather large tax bill, hence looking into options.
Once again, thank you for input.
Btw, neighbor about a mile away has property not much larger by appearance. It's one solid flower farm. Now sure what they do winter time, as it's all in open. No greenhouses.
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