You cannot deduct personal expenses and certain other items on your tax return even if they relate to your farm. taxmap/pubs/p225-016.htm#en_us_publink1000217974
You cannot deduct certain personal, living, and family expenses as business expenses. These include rent and insurance premiums paid on property used as your home, life insurance premiums on yourself or your family, the cost of maintaining cars, trucks, or horses for personal use, allowances to minor children, attorneys' fees and legal expenses incurred in personal matters, and household expenses. Likewise, the cost of purchasing or raising produce or livestock consumed by you or your family is not deductible. taxmap/pubs/p225-016.htm#en_us_publink1000217975
You cannot deduct the following items on your tax return.taxmap/pubs/p225-016.htm#en_us_publink1000217976
Losses of plants, produce, and crops raised for sale are generally not deductible. However, you may have a deductible loss on plants with a preproductive period of more than 2 years. See chapter 11
for more information.
You cannot deduct the repayment of a loan. However, if you use the proceeds of a loan for farm business expenses, you can deduct the interest on the loan. See Interest
You cannot deduct estate, inheritance, legacy, succession, and gift taxes.taxmap/pubs/p225-016.htm#en_us_publink1000217979
You cannot deduct as a loss the value of raised livestock that die if you deducted the cost of raising them as an expense. taxmap/pubs/p225-016.htm#en_us_publink1000217980
You cannot deduct losses from sales or exchanges of property between you and certain related persons, including your spouse, brother, sister, ancestor, or lineal descendant. For more information, see chapter 2 of Publication 544, Sales and Other Dispositions of Assets. taxmap/pubs/p225-016.htm#en_us_publink1000217981
You cannot deduct the cost of raising unharvested crops sold with land owned more than one year if you sell both at the same time and to the same person. Add these costs to the basis of the land to determine the gain or loss on the sale. For more information, see Section 1231 Gains and Losses
in chapter 9
Capitalize the purchase price of land, including the cost allocable to unharvested crops. You cannot deduct the cost of the crops at the time of purchase. However, you can deduct this cost in figuring net profit or loss in the tax year you sell the crops. taxmap/pubs/p225-016.htm#en_us_publink1000217983
You cannot deduct costs related to your gifts of agricultural products or property held for sale in the ordinary course of your business. The costs are not deductible in the year of the gift or any later year. For example, you cannot deduct the cost of raising cattle or the cost of planting and raising unharvested wheat on parcels of land given as a gift to your children. taxmap/pubs/p225-016.htm#en_us_publink1000217984
Generally, you cannot deduct amounts you pay or incur for membership in any club organized for business, pleasure, recreation, or any other social purpose. This includes country clubs, golf and athletic clubs, hotel clubs, sporting clubs, airline clubs, and clubs operated to provide meals under circumstances generally considered to be conducive to business discussions. taxmap/pubs/p225-016.htm#en_us_publink1000217985
The following organizations will not be treated as a club organized for business, pleasure, recreation, or other social purposes, unless one of its main purposes is to conduct entertainment activities for members or their guests or to provide members or their guests with access to entertainment facilities.
- Boards of trade.
- Business leagues.
- Chambers of commerce.
- Civic or public service organizations.
- Professional associations.
- Trade associations.
- Real estate boards.
You cannot deduct fines and penalties, except penalties for exceeding marketing quotas, discussed earlier.