Cattle

[SaltwaterSlick]

Look this article up and ask yourself, is it a hobby or business. I know IRS is scrutinizing small operations. Make sure you have a good CPA that will represent you when the IRS wants to see you. For me its was not worth the headaches anymore.

Why would the IRS want to talk to you? The Ag exemption is for state taxes, not federal taxes. My place is Ag exempt. It was when we bought it and we have continued it. We least the pastures to a guy who ran his cattle on it for a few years... I saw enough from that experience to know I didn't want anything to do with my own cattle of any kind! I just wanted the exemption. We got rid of the grazing leaser and now have it leased to a guy to just cut hay... No more gates to open/close every time I want to go down in the pasture to the woods where I have feeders/stands. No more cattle getting out on the road and everyone around all becoming cowboys to push 'em back on the property... No more claymores EVERYWHERE to step in or run through with the truck or ATV... I absolutely hate cattle! Had to work them when I was growing up. Sure glad I leased to that guy first! It brought my memory snapping right back!!

[Tejas Wildlife]

Why would the IRS want to talk to you? The Ag exemption is for state taxes, not federal taxes. My place is Ag exempt. It was when we bought it and we have continued it. We least the pastures to a guy who ran his cattle on it for a few years... I saw enough from that experience to know I didn't want anything to do with my own cattle of any kind! I just wanted the exemption. We got rid of the grazing leaser and now have it leased to a guy to just cut hay... No more gates to open/close every time I want to go down in the pasture to the woods where I have feeders/stands. No more cattle getting out on the road and everyone around all becoming cowboys to push 'em back on the property... No more claymores EVERYWHERE to step in or run through with the truck or ATV... I absolutely hate cattle! Had to work them when I was growing up. Sure glad I leased to that guy first! It brought my memory snapping right back!!

Lots of wisdom in this post. OP, your best bet is to lease it to someone for a few years & then MAYBE run some yourself. Been around cattle for the first 68 yrs of my 70 yr lifetime, past 2 years have been nice WITHOUT them.

Good luck however you decide.

[Drycreek3189]

I was raised on a dairy, so the only relationship I want with cows involves a knife and a fork.


A rancher once told me that his daddy told him, “Son, always run enough sheep to make you some money, and enough cattle to make you respectable “. I don’t know how much wisdom is in that, but I do know that he ran sheep. Good luck whatever you do.

[gonehuntin]

Why would the IRS want to talk to you? The Ag exemption is for state taxes, not federal taxes. My place is Ag exempt. It was when we bought it and we have continued it. We least the pastures to a guy who ran his cattle on it for a few years... I saw enough from that experience to know I didn't want anything to do with my own cattle of any kind! I just wanted the exemption. We got rid of the grazing leaser and now have it leased to a guy to just cut hay... No more gates to open/close every time I want to go down in the pasture to the woods where I have feeders/stands. No more cattle getting out on the road and everyone around all becoming cowboys to push 'em back on the property... No more claymores EVERYWHERE to step in or run through with the truck or ATV... I absolutely hate cattle! Had to work them when I was growing up. Sure glad I leased to that guy first! It brought my memory snapping right back!!

Your right, the Ag Exemption applies to State Tax exemptions on sales taxes associated with ag use and well known by people that utilize the exemption. But when your claiming raising cattle, writing off expenses, tractors, equipment, etc, and claiming profit or loss on Schedule F of your 1040, then the IRS gets involved.

[SaltwaterSlick]

Your right, the Ag Exemption applies to State Tax exemptions on sales taxes associated with ag use and well known by people that utilize the exemption. But when your claiming raising cattle, writing off expenses, tractors, equipment, etc, and claiming profit or loss on Schedule F of your 1040, then the IRS gets involved.

Things will rock along for 3-4 years without turning a profit, but after that, you'd better come up with something!

[dbaio1]

When we still had a couple pastures left at the farm. We leased it out cheap to a local based on the following. He was responsible for maintaining fencing and could make hay. We in turn could buy and let up to 3 head at one time run with his herd until we were ready to feed out and slaughter. Worked good for several years. Those pastures are long gone and now have 15-17 yr old pine and oaks almost ready to thin.

[RiverRat1]

Get someone to lease it first and watch. That's what I did and I have no desire to do it. I have the Ag Exemption without the headache. It'll take 5 years of running cattle to get the exemption.

This^

Looks easy. But try working with the cattle guy to see exactly what he deals with all year.

It's not for me. Too much work. I give my guy a good deal and he has helped a ton with new fences, cattle pens, windmill repairs (for water in back of ranch) etc. He pays my property tax (plus a little) and it's a win/win.

[Txhunter3000]

Things will rock along for 3-4 years without turning a profit, but after that, you'd better come up with something!

Actually no. My BIL has always claimed a loss on Sch F and never been audited.
Probably 30 years.

[Big pig]

We leased our first place to a great neighbor who ran cows on it outside of deer season and was limited to the number of head.
I was only there 2-3 times a month. (2 hour trip one way) and couldn’t take care of cows and calves.

Great deal for us both. He kept it mowed and watched it.
We got the ag tax and no headaches of feeding cattle during those years of lower prices.

I like the plan of a new fence and running goats to clear the underbrush.

Up here a guard dog is mandatory for raising goats. I would find a lessee who wanted to lease it for goats. Short term.

BP

[katyhighpockets]

Bought a place 4 years ago and inherited a small herd including a 2100 lb black angus bull. All fences were new. He busted out a water gap and gate to see the girls next door at the prom. Live 3 hours from place. Ag exempt a must. Sold herd and putting steers out on it in March and sell prior to bow season. I knew nothing about cattle until buying this place.. I'd lease or try steer only strategy

[miket]

I have also been looking into this for my place in AR. I will most likely run stockers early spring into fall. We have good cool season grass up there, not sure how well that will work here. All my research has shown that every day you have to feed hay is a day you are making nothing.

[Traildust]

Want make $1 million dollars in the cattle business?

Start with $2 million.

[tps7742]

[QUOTE=Drycreek3189;n27019326]the only relationship I want with cows involves a knife and a fork.


I worked on farms when I was growing up and as stated above all I want to do to with beef involves a fork and knife.

[Traildust]

Actually no. My BIL has always claimed a loss on Sch F and never been audited.
Probably 30 years.

You can claim an overall loss every year,,,,,but you better make a profit selling some cattle. Your BIL knows what he's doing. Lease, fencing, equipment & feed can get very expense

[Randy]

If your grass is that good, I would consider going with hay production. Even a handful of cows will eat it down to the ground.

There is generally a lack of quality forage across the state. There is an abundance of hay this year, but every other year, it's been a great business.

I had to work a little harder than usual, but I have already sold out of hay for this year.