Tax Breaks for Raising Bison

Tax Breaks for Raising Bison
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Bison, also known as buffalo in the United States, were nearly exterminated in the early 1900s due to hunting and the expansion of the frontier westward. As a 1901 article in "Recreation" magazine pointed out, "A wild buffalo is looked on as a small fortune walking around without an owner.” Bison are making a comeback due in part to the demand for their meat. While there is no specific tax deduction for raising bison, a farmer can take the usual deductions for livestock agricultural businesses.

Business Expense Deduction

The IRS does not offer any specific tax breaks for raising bison, but If you are in the business of raising any livestock and selling them for a profit, you will be able to deduct all ordinary and necessary business expenses that can be attributed to that business. These expenses would include feed, veterinarian expenses, and other general expenses incurred in operating your business such as utilities and relevant transportation.

Claiming the Business Expense Deduction

In order to claim the business expense deduction on your taxes, you must itemize your deductions and file Schedule A of Form 1040. This schedule covers all of your itemized deductions, not just your ordinary and necessary business expenses. You will be required to enter your business expenses on lines 21 and 23.

Depreciation Deduction Basics

Property that you own and use in operating your bison-raising business may be depreciated over time on your taxes. This includes the costs for the tangible property related to raising the bison, such as stables or equipment, which may be depreciated over time. The land on which you raise the bison cannot, however, be depreciated. Farm buildings are typically depreciated over a 20-year period. If you are raising bison for your own personal enjoyment, you cannot depreciate the property. Since this property is predominantly utilized in a farming business, the Alternative Depreciation System must be used when filing taxes.

Claiming the Depreciation Deduction

In order to claim a deduction for depreciating property, you must file Form 4562 with your Form 1040. You will need to have the cost basis of the property which you wish to depreciate, as well as the number of useful years allowed by the iRS.