I live next to farmers. Everything they do and own is a business expense. The business owns everything. Home, cars, utv, electric, propane, internet, new land, gas, desiel, and red desiel. They go on multiple caribbean vacations, rent out the banquet room and claim it as a business expense. Is this really what business are able to do?
In: Economics
Short of the long: They can’t.
Longer answer: It’s not legal, but it really comes down to enforcement.
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* Home – They can deduct certain parts of the home, like a home office. However, they can’t deduct the entire thing.
* Cars – I see this one getting pushed often in rural areas. Vehicles are necessary for farming, so they have a legit business purpose. However, they’re not supposed to be used for anything other than business.
* UTV – Again, probably a legit business expense. Used for navigating the property.
* Electric/Propane/Internet/Gas/Diesel/Red Diesel – Technically, the can deduct the electric needs of the business operation, but they certainly can’t deduct their personal electric needs.
* Internet – Not unreasonable for a business to have internet. Questionable to be deducting the whole thing.
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Lastly, it’s worth noting that these “deductions” are as valuable as people love to make them out as. You still have to spend money on them. You can’t get around that.
The only thing that’s changing is the possible income tax. That’s going to be a fraction of the actual costs of the expenses.
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