Friday, 9 May 2014

Net Worth: April 2014




Assets$ Amount$ Diff% Diff
Stocks *$235,503-$951n/a
Debts ^$ Amount $ Diff% Diff
Home Mortgage(s)$102,365$90.01%
Net Worth$1,536,614$13,1020.86%

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Anonymous said...

Are there substantial tax benefits with a hobby farm?

Financial Independence said...

Congrats on getting closer to your goals. It is good to see somebody's is making it there.

Anonymous said...

A hobby farm can provide some tax benefits (in the form of deductible expenses that reduce your current income tax), but the rules are more strict than other negative gearing opportunities (eg. investing in rental housing). You basically can only claim expenses if the farm is making a profit (so it's the same as any normal business expense deduction) or has a large amount of capital invested in it and good prospects of making a profit soon. Many start-up costs are not deductible immediately, and are treated as capital costs for establishing the farm, and only get deducted from future net profits, or are part of the cost base when calculating capital gains upon eventual sale of the farm.

My parents ran it as an Alpaca Stud for many years (before moving to their new, larger hobby farm property (100 acres), but as I won't be living on the hobby farm I 'inherited' until my retirement, I probably won't run it as a 'farm' or claim any tax deductions until retirement. Although there may be possibilities for some small-scale income eg. planting some timber or crop trees (eg. hazelnuts) for eventual farm income, or adding some extra rooms to allow for bed&breakfast or 'farm stay' accomodation as a side line when I'm retired there.