1 answer

Two people start raising show horses in effort to make a profit. In the first year,...

Question:

Two people start raising show horses in effort to make a profit. In the first year, they had to income and 30,000 in losses. Should they make use of the election to postpone determination with respect to the presumption described in section 183 of the internal revenue code?


Answers

Answer:

IRS § 183(d) provides a presumption that an activity is engaged in for profit if the activity is profitable for 3 years of a consecutive 5 year period or 2 years of a consecutive 7 year period for activities that consist of breeding, showing, training, or racing horses.

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