Need help with LOE

[Tooliebell]

UW requesting LOE for the farming business tax loss over the last two years.  And lates on credit report for a truck loan payment that is a farm tax write off.

How do I explain the tax loss for the farm? Honestly, we have a ton of depreciation that I write off, do I have to ? No , but it helps elminate our tax liability and helps to negate some of my income from my job, so we can get a larger tax refund.  Can I say that?????

And the lates were from 2009, when my husband lost his job and we weren't actively milking cows.  We still had young cows but not cows that were making money.  We took a small loss that year because of the depreciation on the equipment and the barns. 

I am freaking out a bit that this won't work!

[cdtotten]

I wouldn't get that specific. In short, explain that in those years there was not enough income generated to offset the depreciation expense of the equipment used in the business. Are you expecting the losses to continue going forward?

[Tooliebell]

I don't think we will continue to see a loss.  We just started the farm in 2004, which means with the buildings, cattle, and equipment we purchased we had a lot to depreciate over the last 7 years.  But I took a bunch of 179 deductions in the last two years and full depreciated the cattle we just bought last year. 

Thanks for your respone, i wish I would have thought of that.  I just said that the farm has taken a loss because of the amount of depreciation that has been available to be taken to reduce overall tax liability.  I work outside the home and last year we had a lot of unemployment income from my husband that we needed to offset.  So I fully depreciated a bunch of cattle we bought last year, so our loss looked huge.