What is considered at risk property according to the IRS?
Question by what about government grants?: What is considered at risk property according to the IRS?
I am doing my taxes and I am stumped by the at risk part. We have a small farm and raise a few animals. We plan to expand in the future. But for now, I am trying to figure out what is at risk and what is not and the IRS publications are too confusing about this topic.
Is at risk property any property that has a mortgage? or a loan against it?
We don’t owe any money on the livestock, but we have a mortgage.
What do I do?
Thanks a bunch in advance.
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One Response to What is considered at risk property according to the IRS?
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At risk refers to whether you have the opportunity to lose it or not. Example: You have a cow that you bought with a loan. If you default on the loan, you lose the cow.. You are at risk.
Example 2: You have 6 goats. You get a loan to buy the the goats. If you don’t pay the loan, your father-in-law loses HIS chickens to pay the debt. YOU are not at risk for the loan.
For the most part, unless someone is assuming the risk, you run a business, farm, etc., you are 100% at risk!
— A Damn Fine Tax Advisor
WealthBuilder
January 12, 2014 at 4:55 am