[NAFEX] Agricultural Census

Joe and Ellen Hecksel jhecksel at voyager.net
Sun Jan 12 18:08:48 EST 2003

>>At one time, the USDA used $1000 gross sales or 4 or more horses as the
>>dividing line between hobby and farm.
> Are you serious?   My urban lot is 75 X 125, and my gardening space is 60 X
> 12 feet--very shallow backyard.  BUT, I sell more than $1,000 a year in
> gourmet veggies and berries.  Do I have to report this to someone?
> Hopefully not.  Yeech!  I have been using the money to pay for equipment,
> organic additives and more plants.  Now, I have to file another Schedule C?
> Please say it's not so!
> Doreen Howard

<Joe writes>

I am NOT an accountant.  You should talk to yours.  He/she *might* say 
that it is to the IRS's benefit for you to not be a business.  He/she 
might say that if you were a business and you deducted all your travel, 
tools, labor expenses and other costs, that you would lose money three 
years out of five.

In those cases, the IRS is not likely to press the issue.  They collect more taxes when you pay cost

out-of-pocket then when you are a "business".

Having said all that, every IRS agent and accountant is different and 
may not respond as indicated.

You have to square that with your accountant.   Are they willing to 
"horse-trade" if you are audited?  You also have to balance the risks 
against the burden of paperwork.

I once asked the weekly community newspaper to run a list of sweet corn 
providers.  I thought it would be very handy to have a list of addresses 
  and to know when corn would be available and what varieties they grew.

Mr. Myrkle, the editor, tried to do so.  None of the county's sweet corn 
growers signed up.  He asked them why.  They told him that Eaton county 
(Michigan) charged $200 to be registered as a business.  They were 
illegally engaged in the business of selling sweetcorn....that is, they 
were not a business registered to do business in Eaton county.

The intent of the ordinance was to protect little, old ladies from 
unscrupulous driveway resurfacers.  Here today, gone tomorrow.  The law 
whacked kids trying to pay their way through college.

The differences between the driveway resufacers and sweet corn growers 
are that:
-You can look at an ear of sweet corn and know what it is
-The cost of a dozen ears of sweet corn is less than a Social Security check
-The person who sold the sweet corn is not as mobile as they guys who 
sprayed two gallons of crankcase oil on the driveway
-The assets of the person who sold the sweet corn are far more than the 
cost of a dozen ears of sweet corn.

To the best of my knowledge, nobody from Eaton county every whacked 
somebody selling sweet corn....even though the growers were out in the 
open and had signs at major intersections.  Even the most chicken sh__ 
bureaucrat  understood the spirit and intent of the law.  There is 
nothing to be gained by enforcing the letter-of-the-law vis-a-vis sweet 
corn growers.

-Joe Hecksel
My personal web site: http://my.voyager.net/~jhecksel

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