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I live on 50 acres and have a neighbor that keeps telling me that I can deduct the cost of fencing, pond building and just about everything else I could or would do on my property. How and on what basis? Where do you find more information on this? I do not have livestock. Does having livestock make it a ranch or a farm? Or does it even matter as far as deducting things.
I doubt that anyone here can give you valid, reliable information because they would need a lot more details to do so. You should probably talk to a CPA or even call the IRS. It's a complicated, or at least complex, matter but I think basically the things you mentioned would only be deductible if you are legitimately doing them as a business trying to turn a profit. As to how much proof you would need of that to satisfy the IRS, I can't say. You know anyone can take whatever deductions they want to until they get audited, and then they may owe lots of back taxes plus penalties.
If you think of your property as a small business, then you can write off expenses against the income from the business.
A tax professional ( accountant, tax preparer, H.R. Block or whoever ) can advise you on that.
<font color="blue"> I live on 50 acres and have a neighbor that keeps telling me that I can deduct the cost of fencing, pond building and just about everything else I could or would do on my property. </font color>
There are a lot of people claiming deductions to which they are not legally entitled. Some have been doing it for years and have not been caught. Some (the less bright among them), take this as proof that what they are doing is legal.
The truth is, some will never be caught. The OTHER truth is, those that ARE caught will rue the day they first thought to mess with the IRS. It just is not worth it. They can ruin you, and make you pay them to do so.
Consult a professional, please.
Never, ever take legal, medical or financial advice from random strangers on a forum. Most of the time, you can get a free consultation with a local accountant, if money is the issue, but even if you have to spend a little, the peace of mind is well worth it. You do NOT want to deal with an audit if you can help it, not to mention the penalties that pile up if they determine you're wrong.
I am an accountant and I would certainly tell you to go talk to a tax accountant on this prior to taking the deductions. Yes, if you have a business there you are able to take deductions for certain things that are used in the business. If you would like to give more information I could try to lead you the right way.