0
You own a farm several hours from your home and an aunt has a life estate for half the income and if you need to purchase something for the farm such as a lawnmower is this a personal or farm expense?
Wolson2
It depends on how the farm is used to generate income, and how exactly the mower will be used. If the entire acreage is used for the farm business (that is, no one resides there or uses the space for recreation, and you generate income from the property), then the mower should be deductible as a business expense, provided you keep it at the farm.
Many people think that farmers only use tractors, and grass mowers are used just by homeowners. This is not necessarily true, as farmers need to mow the areas around their fields or pastures where a tractor cannot go. We have a farm where we board horses, and we have a riding mower that we use to mow the fence lines. We deduct it as a business expense.
You're aunt's income isn't really related, assuming that she gets half the net income from the farm...in other words, after the expenses are subtracted and the taxes are completed, she will receive half the profits. If she is an active partner in the business, that would be more complicated.
Incidentally, you might want to consider getting an accountant. My husband and I found that we actually saved money having an accountant do our taxes for the farm, because he found expenses that we weren't counting. It costs us about $200 a year for our personal and Business Taxes for federal, state, and local.
Wiki User
∙ 12y ago
Add your answer:
Earn +20 pts
What is the expense to businesses for physical distribution?
expense businesses
An expense that does not require allocation between departments is a?
direct expense
Define maintenance and other operating expenses?
Operating Expenses are expenses that are incurred while running a business. Maintenance Expense could be considered anything from the cost of maintaining a company vehicle to repairs made on a building or some other type of "maintenance" that is require by the business in order to function at 100%. Many expenses have their own account such as, Utilities Expense, Rent Expense, Insurance Expense, Interest Expense, Supply Expense, just to name a few. Other expense may not have a specific account in which to be recorded, such as Travel Expense, Food Expense (perhaps to entertain a possible client), these expense are often listed under "Other Expenses".
Liability is limited only to the assets of the business and does not extend to individuals?
Correct. If you have unpaid bills then they cannot attack your personal finances; however if you are paying yourself a bunch of bonuses to avoid a bill through bankruptcy that is not a justifiable expense.
Are health insurance premiums a business expense?
If you are paying them for your employees as part of their compensation package, yes, it is a business expense. If it is for yourself, no, it is not a business expense, but it is usually tax deductable under medical costs.
Is the purchase of a building recorded as an expense?
No, the purchase of a building is an expenditure (different from an expense) and therefore must be capitalized.
Is purchase returns an expense or income?
it is neither an expense nor an income
What type of an account is a purchase?
contra-expense It's an expense, not a contra expense. If you don't pay the bill within the discount period, and you had recorded the original purchase at net (Purchase price less the early pay discount) then you have more expense, not less, when you don't pay on time.
What type of an account is a purchase discount?
contra-expense It's an expense, not a contra expense. If you don't pay the bill within the discount period, and you had recorded the original purchase at net (Purchase price less the early pay discount) then you have more expense, not less, when you don't pay on time.
What is purchase expense?
Purchase expenses are those expenses which are incurred at the time of purchase of anything, like - Auto rikshwa's bill means travelling expense after purchasing of goods.
What is a non monetary expense?
Monetary expense is basically a cash-money expense, so a non-monetary expense is an expense that isn't money. Some examples would be physical or personal expense.
What kind of expense is haircut?
Personal care
Are personal drawings a business expense?
No, personal drawings is money you take out of the busniess for your personal use.
Is purchase returns an asset or liability?
purchase return is assets or liability or expense
Is the purchase of a route a capital expense?
If route is purchased for one fiscal year then it is a revenue expense, but if route is purchased for morethan one year then first year purchase portion is revenue expense and remaining portion is long-term asset.
What is an expenses?
An expense is something you have to pay.
Paid cash to owner for personal use is this an expense?
no its drawings
