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Post by badbrad on Jul 6, 2020 9:36:18 GMT -6
Don't know if anyone is an accountant or knows an accountant. Or a tax expert but I'll give this a shot. I typically file my own taxes via Turbotax and normally its pretty easy. This past year my new logging contract included a $5000 downpayment on purchasing the timber. I had that put in there so the company has skin in the game and actual incentive to come and cut it.
So of course I receive a 1099 from the logging company. I spent ~$4000 on the forester to mark the woods, prepare the bid package, and manage the loggers. So I received $5000 in income but had to pay $4000 in expenses. Is there anyway to reduce the income from $5000 to $1000 as I have the 1099 showing $5k and I really didn't gain that income.
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Post by batman on Jul 6, 2020 9:52:07 GMT -6
All mine would be income/expense in an llc.
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Post by Bwoods11 on Jul 6, 2020 10:03:16 GMT -6
Check out information on a basis on your timber? I was told that initial timber sales have some type of formula to reduce taxes, due to this basis (?)
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Post by badbrad on Jul 6, 2020 10:28:08 GMT -6
All mine would be income/expense in an llc. Yep that would be nice. |
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Post by badbrad on Jul 6, 2020 10:31:47 GMT -6
Check out information on a basis on your timber? I was told that initial timber sales have some type of formula to reduce taxes, due to this basis (?) What do you mean the basis |
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Post by kabic on Jul 6, 2020 10:57:12 GMT -6
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Post by chummer16 on Jul 6, 2020 11:38:21 GMT -6
My expertise in accounting advice is throw it in the trash and play dumb if you get audited
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Post by badbrad on Jul 6, 2020 11:43:35 GMT -6
My expertise in accounting advice is throw it in the trash and play dumb if you get audited I always wondered how that would actually work if a person did that. How much would they throw the book at you? |
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Post by kabic on Jul 6, 2020 11:52:50 GMT -6
They would fine out 2 or 3 years latter and charge you tax owed plus interest at the least.
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Post by nhmountains on Jul 6, 2020 11:53:22 GMT -6
My expertise in accounting advice is throw it in the trash and play dumb if you get audited I always wondered how that would actually work if a person did that. How much would they throw the book at you? It depends if they have a hair across their ass. I have some friends in Vermont that were audited. The guy told them he would take as long as it took to audit them. (They were Tea Party people) The guy was there for a month auditing them and they had a nursey business to run. It was during their busy season. If you're not a Tea Party person then the odds are much lower though. my guess is there's a form that you'll fill out that shows your income and expense for the logging. |
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Post by Freeborn on Jul 6, 2020 12:14:11 GMT -6
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Post by chummer16 on Jul 6, 2020 12:20:27 GMT -6
My expertise in accounting advice is throw it in the trash and play dumb if you get audited I always wondered how that would actually work if a person did that. How much would they throw the book at you? I will let you know someone I know is 5 years in, assuming they are safe after 7. |
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Post by badbrad on Jul 6, 2020 13:21:41 GMT -6
Thanks. That looks like the ticket. |
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Post by honker on Jul 6, 2020 13:28:14 GMT -6
All mine would be income/expense in an llc. Yep that would be nice. You can have business income/expenses without having an LLC. You can have a working farm in the eyes of the IRS with income, expenses and depreciation included as part of your normal tax filings No different than if you sell hay or rent crop land from your property. If you aren’t doing that already, you might be missing out on a nice tax shelter. Remember you have expenses beyond what you paid the forester. Mileage for visits and follow ups, gas and time for any prep work you did, tools you had to buy to make it go well...you can make that income a loss pretty quickly. Gets a bit more complicated than standard turbo tax can handle for you. If you are set to make even more income in the future, it would probably be worth spending time with the tax advisor to get it set up right. |
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