Trailer

Forum|Forum|5 years ago
April 1, 2021
9 replies
27 views

$5,000 1099 for horse shows

they bought a trailer that costs $54,000 to sleep in and pull it with a truck. They paid $4,511.23 in interest during 2020.

What should I do to deduct this expense?

Depreciation?

Thank you

ProSeries Professional

This topic has been closed for replies.

sjrcpa

Level 15

Is horse shows a trade or business for the taxpayer?

a hobby?

The kid's hobby?

The more I know the more I don’t know.

taxiowa

Level 8

Depreciate the % used for business use of transporting horses. The personal pleasure use is not deductible. As to the interest. The business use portion would be reported on Schedule C or F. The personal use portion of interest may be includible on Sch A as 2nd home. Usually the purchase of these is for "Hobby Business", so convince taxpayers that the best way to survive an audit is to be reasonable and only take a % to business.

MGC94Author

Level 7

How do I depreciate the % used for business? What type of asset would it be on the depreciation asset entry worksheet? They do not transport the horses in the trailer. It is for them to stay in when they travel to another state instead of getting a hotel. Where would I put this on the Sch C?

dd4vols

Intuit Community Champion

I have a client that has been in the horse-show business for many years. They bought a $225k motor home for the same purpose you are describing. i used 25% as the business usage and survived an audit unscathed on that issue. I had asked my clients to create and maintain a website for this business, which they did also. but their volume of winnings/stud fees/etc were much more substantial. I just set it up using a standard farm equipment useful life. And the auditor was very pleased we didn't try to validate 100% use and therefore 100% deduction..

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