Deductions claimable for a breeding hobby

[Skyjack]

Hi All,

.        Just finished my 2015/16 tax return. In this return I entered the dogs as a hobby as this current year we have sold 7 pups. To align with my accounts thinking is to claim everything involve in breeding and showing. His take was 100% claim on every claim except for only 50% for both petrol to shows and show entries. He has his mind fixed that it is towards a business. I let him know that I have not intentions of sales being over $20k when at that point I can claim accumulated past loses. He is struggling with the concept of hobby not a business. All up using his guidelines I lost $5000. I have started to put the current years figures on paper. If I have sold only for this financial year I want to claim everything I can as a deduction to simply break even. I have no problem paying taxes but will not be going over $20 K in sales, every.

 

         So I'm asking for people's experiences and what outgoings do they use and what percentages of them to show outgoings usually excede income.

         Thanks for your help and advice. Do I need a special ruling. My accountant is thinking business, he sees shows as 50% pleasure hence the 50% outgoings claimable for fuel (.66 cents per K one way) and show entries.

Skyjack 

[Mrs Rusty Bucket]

my accountants - have never let me claim anything related to playing and umpiring hockey - they regarded that as a hobby... and as best I could tell - so did the ATO - despite the fact I was making more money at umpiring than I was in the business they did allow me to have an ABN and claim.  Weird.

If you have dog breeding and showing related qualifications eg tafe certificates in animal husbandry and you made more than you lost - maybe that would be a business?

I would get a second opinion...

http://www.smh.com.au/small-business/finance/when-does-a-hobby-become-a-business-20131007-2v48s.html

 

There are a number of relevant pages on the ATO website but right now it seems to be broken. 

 

 

[karen15]

MRB is right, income and expenditure from a hobby does not go on your tax return. The best source of info on business vs hobby is the ATO ato.gov.au Just search hobby and things should come up.

 

as to the advice of shows being 50% pleasure - if that was from your accountant I'd be finding a better one! If I were your accountant my advice would be that shows are where your animals are displayed and promoted. It is how you get known and is a form of advertising, therefore 100% deductible if you are carrying on a dog breeding business. I spent a decade as a tax accountant in big 4 accounting firms, so have a vague idea on these things

[Boronia]

2 hours ago, karen15 said:

MRB is right, income and expenditure from a hobby does not go on your tax return. The best source of info on business vs hobby is the ATO ato.gov.au Just search hobby and things should come up.

 

as to the advice of shows being 50% pleasure - if that was from your accountant I'd be finding a better one! If I were your accountant my advice would be that shows are where your animals are displayed and promoted. It is how you get known and is a form of advertising, therefore 100% deductible if you are carrying on a dog breeding business. I spent a decade as a tax accountant in big 4 accounting firms, so have a vague idea on these things

Maybe check if your accountant is a Charted or CPA accountant...it does make a difference, I would rather a CPA or Chartered accountant than an accountant who has a diploma in accounting

http://www.trakaccountants.com.au/chartered-accountants-cpas/

[Skyjack]

Thanks everyone, I agree. I'm not in it for a profit and don't want my hobby to be classed as a business. This financial year I have sold seven pups. I will be proving to the accountant that at 100% claimable there is no profit. He is a CPA and I have been with him for 18 years. Thanks for your comments and advice.