# Selling Pigeon and Paying Taxes



## ERIC K (Mar 29, 2010)

Does anyone operate like a business when it comes to buying and selling of their Pigeons ? If so what IRS forms do you use, schedule F or form 4797 ?


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## honeyrobber (Apr 28, 2011)

I use an accountant. All farm expences and income get listed. But I farm for a living. The eggs and chickens that get eaten at home and veggies eaten at home are not counted as losses as we only count what is sold. Have no idea what form it is without getting into my records.


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## SmithFamilyLoft (Nov 22, 2004)

ERIC K said:


> Does anyone operate like a business when it comes to buying and selling of their Pigeons ? If so what IRS forms do you use, schedule F or form 4797 ?


 It has been so many years since I actually looked at a tax return, since my CPA does the electronic filing thing, and I don't want to get depressed so I just mail the check and never really look at the return, so I have no idea what forms are used for anything. If you end up with losses for so many years, the IRS will classify your "business" as a hobby. I have never ever even come close to making a "profit" so if you are actually making money in it, then congradulations, since very few ever really do.


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## ERIC K (Mar 29, 2010)

Yes I know the Hobby / business thing, I'm going to our CPA tomorrow I just wanted to get an idea of where we stand in the profit or loss department before hand. It's different for everything like horse breeding or maybe Pigeon breeding. I was hoping to hear from some people like me that have to claim profit from animals sales. This will be my first year adding sales from Pigeons to our farm business. I have spent all day going through mountains of paper work and receipts. Thanks for the replies.


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## bbcdon (Oct 16, 2007)

It would be a profit & loss form (schedule C). If you show a loss for more than 2 years, the IRS considers it a hobby.


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## raftree3 (Oct 16, 2010)

If you had some income or have a business plan with expectations for profit, I'd use the Schedule F (Profit or loss from Farming). I think you could actually make a case for profit and loss towards breeding and sending birds to One Loft Races etc.


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## ERIC K (Mar 29, 2010)

I always use the schedule F form but wasn't sure about pigeons . I will let you all know what happens after tomorrow. I know horses you need to have a profit 5 out of 7 years. It is a bit confusing because one year with out reporting the taxable income from sales will get some attaintion too. Breeding stock is an asset to be depreciated over time as well as buildings, and when they are sold the difference is taken in consideration.
I just want to play by the rules and if I have to pay so be it but I'm sure I will have much to write off.


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## Boroview Farm (Mar 11, 2010)

I include all expenses on my schedule F. Like others, I have other farm income. My Farm Bureau accountant considers my pigeons as another part of my farm, so I get to claim it all!


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## raftree3 (Oct 16, 2010)

ERIC K said:


> I always use the schedule F form but wasn't sure about pigeons . I will let you all know what happens after tomorrow. I know horses you need to have a profit 5 out of 7 years. It is a bit confusing because one year with out reporting the taxable income from sales will get some attaintion too. Breeding stock is an asset to be depreciated over time as well as buildings, and when they are sold the difference is taken in consideration.
> I just want to play by the rules and if I have to pay so be it but I'm sure I will have much to write off.


I'll be interested in how you get along. I didn't use my pigeons this year but will try next year.


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## SmithFamilyLoft (Nov 22, 2004)

ERIC K said:


> I always use the schedule F form but wasn't sure about pigeons . I will let you all know what happens after tomorrow. I know horses you need to have a profit 5 out of 7 years. It is a bit confusing because one year with out reporting the taxable income from sales will get some attaintion too. Breeding stock is an asset to be depreciated over time as well as buildings, and when they are sold the difference is taken in consideration.
> I just want to play by the rules and if I have to pay so be it but I'm sure I will have much to write off.


 Once we sat down and figured out depreciation on everything from breeding stock to use of vehicles to transport on training tosses, various club, combine dues, racing fees, One Loft events, feed, medical, publications, use of office, computer, pigeon clocks, medical supplies, birds lost in racing, payments for loft cleaning, advertizing, training manuels, books, tapes, CD's, phones, bands, loft construction, $30,000 security fences, etc. etc. etc. have been able to manage it in such a way that I would never show a taxable profit. I never review this with CPA in front of my wife, cause she would pass out if she knew how much my "hobby" or "Investments" if you will, have made out.  A lot like owning a race horse, unless you hit a huge jackpot, it typically is just a money pit.  Also much like owning a boat, it is like a hole in the water that you keep pouring money into !!


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## Kal-El (Oct 10, 2008)

I'm not sure if this is exactly on topic, but you may want to keep a list of all your expenses. This holds true especially if you're into money races, and you win a few. Let's say for example, you win the Midwest Convention Race and the payout is $6,000. Uncle Sam would like to know if your losses (i.e. feed, medication, gas mileage, etc.) balances out your winnings.


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## klondike goldie (Apr 20, 2009)

I have never even broke even on pigeons, let alone made a profit. If I wrote down every cent that I spent on pigeons, I would probably get out of it. I'm just in it for the fun.


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## SmithFamilyLoft (Nov 22, 2004)

klondike goldie said:


> I have never even broke even on pigeons, let alone made a profit. If I wrote down every cent that I spent on pigeons, I would probably get out of it. I'm just in it for the fun.


Same here.  If I do hit a decent sized jack pot, I simply make sure I "re-invest" my "profit" into a good looking import or two, and there goes my "profit", even if I win $100,000 I would simply pour it all back in my operations, that way I never have to cut the goverment in for a slice.


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