I'm trying to research the differences between hobby farms and actual business farms. We have a small herd and I plan on breeding 3 of my does this year, then breed all 7 does next year and sell the kids. I don't have full blood/registered goats, but I do have very nice quality gals. I want to provide small family farms like mine the option to own goats at a lower price than some of the farms in my area (most are registered herds producing show quality expensive goats). I'm not looking to make a profit, but to have the girls start helping out their feed bills a little :wink: I've read, re-read, then read again the IRS website along with other articles and it seems that what I’m looking/able to do is a hobby farm. I have a hard time believing that I can make a profit 3 out of 5 years (which is what the IRS wants to see in order for you to be a business) and I’m afraid to start claiming my goats as a business only to find out it’s a hobby farm in the IRS eyes and owe them lots of money. I know that in a hobby farm you report your income as “Additional Income”, you must itemize your deductions (which we already do anyway), are only able to deduct your expenses up to the amount of your income and that there are 3 categories of misc deductions that qualify. Does anyone have a hobby farm, not a business? If so, I would really appreciate feedback about how you handle everything and what experiences you have. Does anyone find that you really can’t deduct any of your expenses (such as feed bills, vet bills, repairs, etc) because your additional income is already “cancelled out” due to the first category of misc deductions (real estate/personal property taxes and the like)? I know I can fill out Form 5213 with the IRS which basically says I’m not sure if I’m a for profit company or a hobby farm, but, again, I don’t want to claim deductions only to find out 5 years down the road the IRS doesn’t consider me a business and makes me pay up for the deductions I was claiming. I’m more or less trying to get this right from the beginning so I don’t hurt myself in the long run. Thanks a bunch!