Tax Implications of Cattle Farming
Cattle Depreciation and Tax Exclusions
- Dairy cows and breeding cattle can be depreciated over 5 years.
- In Pennsylvania, 15 cows yields an income tax exclusion.
- You do not deduct cattle purchases in the year bought unless sold that year.
- Several cows needed for farm tax break and profit in 3 years.
Raising Livestock and Tax Responsibilities
- If you raise livestock for profit as your main income, you must pay business taxes.
- Capital gains tax applies to raised cows, while calves go on Schedule F with higher taxes.
- Avoiding animal taxes risks fines, like 3,500 euros in Austria.
- Income from cattle intended for sale is ordinary income.
Environmental and Reporting Considerations
- Cow methane emissions damage the atmosphere.
- Prepaying expenses then selling two calf crops later concentrates taxable income.