Schedule C or F?

[Catherine]

Client's wife started a new business in 2021:  breeding cats.  Is this Schedule C or F? 

If the answer is F, the next question is since they also have a small farm, could I include the cats in the existing Sch F or would it need its own, second, Sch F? 

(Made more money on the cats in the first year than the farm has ever made, and already have a two-year waiting list for kittens. Who knew?)

[TAXMAN]

My understanding is its a Schedule C. When I had breeding dogs during the audit she told me they belong on Sch c which is where I put them. Although when done with F and C still had a loss.

[schirallicpa]

I was leaning to the Sch F actually.  A second Sch F if it's his vs. hers.  (When will they bring back the joint Sch F and joint Sch C????)  Breeding animals includes pigs, and chickens, and cows, and pups and kitties.  If they didn't already have a farm, then maybe I would say C.

 

[Catherine]

Husband has a Sch C; he makes furniture, so definitely doesn't have anything to do with his self-employment.

She has a Schedule F; raises sheep and goats and poultry.  Sells grown animals and maybe a couple dozen eggs a year.  For 2021, she added in breeding some fancy variety of cat, but they're not out in the animal barn!  She keeps the records separate, too.  (Green ledger paper for all of it; his and both of hers - and praise God for that, because her ledgers are clean and neat. I've seen her computer "communications" and they're a total jumble.)

Does that help?

[Lee B]

Is this a hobby or a business?

[jklcpa]

I would put that on Sch C. I don't see any connection to cats and farming because cats are not livestock.

[Catherine]

13 hours ago, cbslee said:

Is this a hobby or a business?

It's a business, not a hobby. Already making far more money than the farm, which is also a business not a hobby.

[Catherine]

13 hours ago, jklcpa said:

I would put that on Sch C. I don't see any connection to cats and farming because cats are not livestock.

Cats are not livestock, true. I got sidetracked by the common theme of "raising animals for resale" which she does with her sheep and goats.

[TaxmannEA]

The qualification for farming is the production  for food or fiber. Cats would only qualify if you are making kitty wool sweaters or supplying a weird BBQ joint.  

[BTS]

We are in farm country.  I would do schedule f.  Keep it simple, unless you want to charge for doing another schedule c.  We have several farmers who raise herding dogs along with the usual farm animals and use f.   But there is more than one way to skin a cat    

[Catherine]

I think I'm going to go with Schedule C. These pets instead of any kind of herding/farm animal or livestock, and there are no hand-spinners or BBQ places around here that would consider the cats as source material. Not too much fur off of a kitten before it's placed, either.