I would like to thank you for taking the time to talk to me yesterday regarding my deceased mare Picante. Your credentials are very impressive and I would certainly feel confident if you were handling Picante’s case. D. Largeteau, Axens North America more testimonials... Title: "IRS Section 469 - Its effects of the equine industry and those involved" Author: Allyson Nelson We are all horsemen because of the passion we have for the special horses in our lives. Most of us consider our time spent with the horses a hobby and some of us consider it to be a business. Those who look at their time with the horses as a business need to be aware of IRS Section 469. This internal revenue code discusses passive activity losses and credits. A passive activity is a “business in which the taxpayer does not materially participate on a regular, continuous, and substantial basis.”   If an equine enthusiast is lucky enough to persuade the IRS that their interest in horses is actually a “business” it is unlikely that they will be able to deduct any losses from the horse business from any other income they incur. Losses from any passive activity can only be deducted from other passive activities. One benefit is that the “passive losses” can be carried over to future years. For the IRS to look at an equine business as active the owner must prove that they are a material participant in the business. Generally if one works 500 hours annually in the business the IRS will consider it active. If one works between 100 and 500 hours the IRS will look at many other aspects of the owner and business to determine if the business is passive or active. If one works under 100 hours in the business you will almost always be considered passive. Back to Articles Main Page NAES would like to thank all of the contributing photographers for their generosity in allowing NAES to post photographs throughout this web site. Photo credits are listed, where appropriate. Home - Qualified Equine Appraisals - Advisory Board - NAES' Spotlight - NAES' David D. Johnson NAES Tip of the Month - About NAES - NAES' Horse of the Month - Professional Directory - Legal Services Rule 26 Case Histories - Contact NAES - NAES' Newsletter - State Equine Agister's/Feed Liens - Resources States Equine Activity Statutes - Horse of the Month Archives - Articles - Equine Services - NAES' Videos Clients: Payments On-Line - Willoway Farm - Site Use Policy - Privacy Statement - Site Map Copyright North American Equine Services, L.L.C. 2023 All Rights Reserved. Webmaster: Media People International click to contact