Previous Page: Publication 225 - Farmer's Tax Guide - Capital Expenses Next Page: Publication 225 - Farmer's Tax Guide - Losses From Operating a Farm Use   to find additional occurrences of topic items.

taxmap/pubs/p225-016.htm#TXMP11ec1336 Nondeductible Expenses(p25)

Nondeductible Expenses

You cannot deduct personal expenses and certain other items on your tax return even if they relate to your farm.

taxmap/pubs/p225-016.htm#TXMP4fa99361 Personal, Living, and Family Expenses(p25)

Personal, Living, and Family Expenses

You cannot deduct certain personal, living, and family expenses as business expenses. These include rent and insurance premiums paid on property used as your home, life insurance premiums on yourself or your family, the cost of maintaining cars, trucks, or horses for personal use, allowances to minor children, attorneys' fees and legal expenses incurred in personal matters, and household expenses. Likewise, the cost of purchasing or raising produce or livestock consumed by you or your family is not deductible.

taxmap/pubs/p225-016.htm#TXMP17e0e593 Other Nondeductible Items(p25)

You cannot deduct the following items on your tax return.

taxmap/pubs/p225-016.htm#TXMP3ff830fe Loss of growing plants, produce, and crops.(p25)

Losses of plants, produce, and crops raised for sale are generally not deductible. However, you may have a deductible loss on plants with a preproductive period of more than 2 years. See chapter 11 for more information.

taxmap/pubs/p225-016.htm#TXMP1e34b3e3 Repayment of loans.(p25)

You cannot deduct the repayment of a loan. However, if you use the proceeds of a loan for farm business expenses, you can deduct the interest on the loan. See Interest, earlier.

taxmap/pubs/p225-016.htm#TXMP6b3cf9ef Estate, inheritance, legacy, succession, and gift taxes.(p25)

You cannot deduct estate, inheritance, legacy, succession, and gift taxes.

taxmap/pubs/p225-016.htm#TXMP4a990f73 Loss of livestock.(p25)

You cannot deduct as a loss the value of raised livestock that die if you deducted the cost of raising them as an expense.

taxmap/pubs/p225-016.htm#TXMP6aea9cf8 Losses from sales or exchanges between related persons.(p25)

You cannot deduct losses from sales or exchanges of property between you and certain related persons, including your spouse, brother, sister, ancestor, or lineal descendant. For more information, see chapter 2 of Publication 544, Sales and Other Dispositions of Assets.

taxmap/pubs/p225-016.htm#TXMP3ebddb79 Cost of raising unharvested crops.(p25)

You cannot deduct the cost of raising unharvested crops sold with land owned more than one year if you sell both at the same time and to the same person. Add these costs to the basis of the land to determine the gain or loss on the sale. For more information, see Section 1231 Gains and Losses in chapter 9.

taxmap/pubs/p225-016.htm#TXMP74a45f1e Cost of unharvested crops bought with land.(p25)

Capitalize the purchase price of land, including the cost allocable to unharvested crops. You cannot deduct the cost of the crops at the time of purchase. However, you can deduct this cost in figuring net profit or loss in the tax year you sell the crops.

taxmap/pubs/p225-016.htm#TXMP181476f0 Cost related to gifts.(p25)

You cannot deduct costs related to your gifts of agricultural products or property held for sale in the ordinary course of your business. The costs are not deductible in the year of the gift or any later year. For example, you cannot deduct the cost of raising cattle or the cost of planting and raising unharvested wheat on parcels of land given as a gift to your children.

taxmap/pubs/p225-016.htm#TXMP37bec9c3 Club dues and membership fees.(p25)

Generally, you cannot deduct amounts you pay or incur for membership in any club organized for business, pleasure, recreation, or any other social purpose. This includes country clubs, golf and athletic clubs, hotel clubs, sporting clubs, airline clubs, and clubs operated to provide meals under circumstances generally considered to be conducive to business discussions.

taxmap/pubs/p225-016.htm#TXMP7eadf00f Exception.(p25)

The following organizations will not be treated as a club organized for business, pleasure, recreation, or other social purposes, unless one of its main purposes is to conduct entertainment activities for members or their guests or to provide members or their guests with access to entertainment facilities.

• Boards of trade.
• Business leagues.
• Chambers of commerce.
• Civic or public service organizations.
• Professional associations.
• Trade associations.
• Real estate boards.

taxmap/pubs/p225-016.htm#TXMP594fab57 Fines and penalties.(p25)

You cannot deduct fines and penalties, except penalties for exceeding marketing quotas, discussed earlier.

Previous Page:  Publication 225 - Farmer's Tax Guide - Capital Expenses Next Page:  Publication 225 - Farmer's Tax Guide - Losses From Operating a Farm Use   to find additional occurrences of topic items.