Claiming Your Dog on Your Tax Return: Part 2

95 thoughts on “Claiming Your Dog on Your Tax Return: Part 2”

1. Hi Cindy,
   You tell me. Does your dog really guard your inventory? Is your “guard dog” a “regular and necessary” part of your business? Let’s try a different approach. If you moved your business out of your house, would you put your dog at your warehouse to guard your stock? Remember, if you claim a dog on your tax return, you’re basically asking for an audit. So – would you pass the audit? My gut is telling me no. But I don’t know you, I don’t know your business. But let me ask you this–if you were to get audited about the dog – are your books in perfect order – so that you’d survive the rest of the audit? You really want to think long and hard before you claim a dog as a business expense on your tax return.

2. I have a business in which I work from home so all of my inventory is kept in my house. I was told at one point that since my dogs are essentially used to guard my house and my inventory that I could claim them as a business expense on my taxes. Is that correct?

3. Hi Amy,
   Your service dog sounds wonderful! And certainly he sounds like a qualified service animal. That makes him a legitimate medical expense deduction on your tax return. That said, if your only income is SSD, then you may not need the deduction. But if you do claim expenses, the dog costs would go on your schedule A as a medical expense.

4. I’m totally disabled due tooseizures. I get SSD. I have a dog that helps me get though the seizures. Some times he will actually let me know before I have a seizures. When I’m coming out of the seizure he is right there making sure that I wake up. I have been told that I can take him off on my taxes as a service animal. How can I do that.

5. Hi Lynette,
   You could probably write off any business related expenses. For example, if you photograph them with toys, write off the toys, etc. You would want to create a log of “work time” versus personal time. You probably could not write off all of their expenses, but with a good log, you could probably write off a portion of their expenses as a percentage of “work time” versus being a pet time.
   But note this – if you’re not making any money taking pictures of your dog – then that’s not really a business yet and I wouldn’t try to write off any expenses until you actually make money from it.

6. I’m wanting to start a pet photography business. I’m building my portfolio, and using my own dogs for “professional development” (improving my pet photography skills), and when I start the business, they will be used extensively in advertising. I may also sell their images as stock photos. Would I be able to write off their expenses? Or would that not be considered regular & necessary to the business? Thanks!

7. Hi Tammy,
   You’ve got two businesses. The dog business and the child care business. Your issue is the “home office” deduction The big thing for you is keeping them separate. Also– note that the IRS is more likely to look at two home offices funny. So, you want to do this right.
   First, it sounds like you’ve got the day care space all worked out so I’m not going to touch that. So what do we do about the dogs? Is there a space that is 100% used only for the dogs? It’s not the kitchen, that’s for certain. I’m thinking it’s not the puppy room either since they’re only there for one week. So if you don’t have a space in your home that is 100% used only for the dog business, then I’d drop the home office altogether.
   Think in terms of an IRS audit where they come to your house and look at your home office. (Yes, that really does happen.) What do you show them? Is that space also the daycare? Then no, it’s not 100% used for the dogs.
   If you do have a space that you can say is 100% used for the dogs, then you can claim a home office for it. You would prepare a second 8829 to go with your second schedule C. I’m not sure how well Turbo Tax handles multiple forms, but that’s how you’d do it.
   You said rental, so you don’t have to worry about the real estate taxes and mortgage interest. But if you owned your home, you would have to reduce the mortgage interest and real estate taxes from your schedule A that gets reported on the second 8829. It would be a manual adjustment, not done naturally in Turbo Tax. I’m mentioning it mostly in case somebody else reads this post. I don’t know of any software (not even my professional software) that can run two 8829s with mortgage interest without doing a manual adjustment. That’s why the IRS likes to audit returns with 2 home office deductions because they are often done wrong.

8. Hi Jan,

   I’m thrilled to have stumbled across this web page. Lots of great info. Read many of the post and answers, thank you.

   I will be claiming my breeding business this upcoming tax season. Breeding technically seems to be quite the full time job!! I’ve done this for a few years as a hobby but wanted to turn it into a business. This past year my other female whom was purchased to be a breeding female has come of age and produced 2 beautiful litters. I now have two breeding females, getting two-three full litters per year. With this said, you’ve answered several of the questions on which to claim as a hobby or business and on which lines…etc. Thank you!! 🙂

   My question is, what about the time space percentage of the breeding business that can be used to deduct expenses such as rent, utilities, internet, water etc. The puppies are born in the home, spend two weeks in one room then two to three weeks in the kitchen, the adult dogs sleep inside the home. I also run a Family Child Care from my rental Home from 5am-5:30pm M-F….which I already claim about 54% time space percentage on my tax return. I was waiting for the turbo tax 2015 to come out to purchase to see what that system says about it but want to be prepared ahead of time. I’ve used turbo tax for 7 yrs. I put several hours a day into the dog breeding business aside from my childcare hours. I do know that any double duty time from 5am-to 5:30pm cant be counted twice. So technically I guess you cant claim one business 50% and the other 50%…. I guess I would have to account for 6hrs of sleep per night as off time. Although…during the first two wks of a litters life….I’m sleeping right next to the breeding box to minimize loss of life (minimal sleep). What is acceptable to the IRS, as far as time percentage, when running two separate businesses from you home?

   Thank you Jan,
   Tammy

9. Hi Rae,
   If you sell the puppies as a hobby and make money, you report the income on line 21 of your federal 1040 tax return. You put the expenses on your schedule A on line 23. You can’t deduct more in expenses than you have in hobby income, and your hobby expenses are subject to the 2% of AGI limitation.
   So–hobby expenses aren’t as good of a deduction as schedule C expenses. But–and this is important. If you’re really only doing one litter, and it is a hobby, then that’s the right way to handle it. And doing it right is better than getting a bigger deduction.

10. I was thinking about having a litter of puppies and am wondering if I sold a litter of puppies as a hobby, if I would report the income as Other income or as a Schedule C? I’m not trying to start a business, I would not be trying to claim losses over and above what I made, it would just be as a hobby. I thought of a couple of possible scenarios that could happen, but I’m not sure how that would work.

    If I made $1,500 selling a litter of puppies and spent $1,500 on expenses throughout the year, how would I report that on my taxes since I didn’t make or lose money?

    If I made $2,000 selling a litter of puppies and spent $1,500 on expenses throughout the year, would I report the $500 on a Schedule C or just as other income since I am not a business?

    If I made $2,000 selling a litter and spent $5,000 on expenses, but didn’t want to write off the other $3,000 since it would just be a hobby and not an actual business, how does that work?

    Thanks

11. Hi Molly,
    Here’s the post you really need to read about your puppies: http://robergtaxsolutions.com/2014/01/depreciating-a-bitch/

    And about your breeders license. For that, you’ll need to contact the licensing folks and talk to them. I don’t know about licensing. Sorry.

12. I bought two female puppies they were 12 weeks when I bought them for sole reason of breeding….I already have the male who is fully matured. Should I wait until I can actually breed the females to count them as a business. I saved all receipts, and expenses for feeding, and trip to get puppies? Also do I need a breeders license this year, or like I said can I wait until they are actually gonna be breed.
    thank you

13. Hi Irene,
    Now that your dog is mature for stud, you may begin to depreciate him. This post might be helpful to you: http://robergtaxsolutions.com/2014/01/depreciating-a-bitch/

    I think you’re on the right track about deducting your breeding expenses. And I also think you’re on the right track about being a business.

    The one thing that I think really helps promote the “business” model, is if you can get a 1099MISC for anything. For example: let’s say someone else with a dog business hires your dog for stud. Since they are a business, if they pay you over $600 then they have to issue a 1099misc for the money they pay you. The IRS requires you to file a schedule C if you receive a 1099misc. So, I recommend that dog breeders start issuing 1099misc when they’re paying for stud service. It would help legitimize the business aspect in the IRS’s eyes.

    Individuals do not issue 1099MISC so if an individual not in business to raise puppies hired your dog, they would not be obligated to issue a 1099MISC. That’s okay, you can still do business with them (I do lots of tax returns for individuals, not businesses) you just won’t get a 1099MISC.

    I think your business model sounds good.

14. Hello,

    I read your comments on this page with great interest — there are not many resource son the Web addressing the issue of taxes and dogs. Here is my question:
    Two years ago we got a puppy — not just “a puppy” but “the puppy” for potential breeding — came from a top European breeder, excellent bloodlines. I said “potential” only because anything can happen before the dog matures. 2013 and 2014 — a lot of show expenses to get an AKC conformation Champion title and health clearance — each is a must for responsible breeding (and for high stud fees) — plus shows are not only for the title but for exposure, networking, and the best way to advertise. He already produced excellent puppies as a stud this year — now two more breeding inquiries already, but no profit yet. how is that seen by the IRS?– there is revenue, but the loss exceeds it.

    Can I deduct expenses which I consider directly related to breeding — in our case, showing (show entry and handler fees and travel) and health tests? My business model looks like this: get the Champion title and health clearance, then start collecting stud fees (and for such a dog with such pedigree it is $1200 and up). A stud dog of his pedigree and quality can easily be in demand for more than one litter per year, for many years, even after his lifetime is over (with frozen semen). So, most expenses are in the past now — can I deduct them on 2013 and 2014 returns? I am not planning to deduct anything which is not related to breeding (example: vet visit for vaccination would be needed regardless of breeding, but a visit for a health certificate was only required to go to Westminster in NYC )

    I read about business vs. hobby tests, and we meet most of the criteria for business — we did it in the past (showing and breeding), have the skills, etc, and showing is not something we enjoy doing (who in sane mind would spend endless hours show-grooming and getting up at 4 AM on a weekend to drive to a show instead of, for instance, going to the lake?), but it is hard to predict if the value of the stud dog would appreciate over time, and we don’t depend on this income because it is small compared to our wages.

    What do you think?

    Thanks!

15. Hi Chastity,
    I’m sorry about your dog. So you’ve owned the dog for more than a year and you’ve been depreciating her on your tax return. On your tax return, you’ll treat it like a $0 sale – removing the asset basically. It get’s reported on form 4797 in part 1.

    You’re working off the farm rules, chapter 9: http://www.irs.gov/publications/p225/ch09.html

16. Question. If you do claim your dog as a breeding dog with the depreciate set in motion and it dies. Do you claim it as a loss?

17. Hi Lourdes,
    I think you’ve got a really interesting question. I think you definitely have a dog that’s a legitimate business expense so how to claim it is the issue.

    First, I’m going to send you to this post: http://robergtaxsolutions.com/2014/01/depreciating-a-bitch/ It’s about claiming the depreciation on a breeding dog–and even though you are not breeding your dog, it think the same rules apply for your business purpose.

    The important issue here is that you can’t actually start expensing the dog until it’s placed into service–but you’ve already done that so you’re good.

    So, you would claim the dog as an asset. You may either depreciate the dog over 7 years, or take a section 179 expense. The link I have you has more information about that.

    But I think making the dog an asset makes the most sense for your business. Then of course you still expense the cost of maintaining the dog the way you always have.

18. Hi Jan,

    I have a question for you. I’ve been teaching workshops on energy healing for many years. In the workshops I teach participants how to use the energy healing techniques on people and animals. For 11 years, I used my dog for demonstration purposes in the workshops. He was also used as a therapy dog during the classes as well as when I gave private sessions to clients. The dog’s participation in the workshops and private sessions has been regular and necessary and I can demonstrate this fact. As such, I had been claiming dog related expenses under “workshop expense” in my income taxes.

    That dog died last October and I had to buy a puppy to replace him in the classes. I decided on a puppy instead of an adult dog because it’s very important to make sure the dog is properly socialized to be around adults and children who attend my classes. And so, I had the expense of buying the puppy, training her, and putting her into service. My question is as follows, under which category should I list the purchase expenses for the new dog? Workshop expense? or other?

    Thanks so much for your time,

    Lourdes

19. Hi Stephanie,
    You have a hobby, you admit you have a hobby. It’s only one litter. Stick with calling it a hobby. The only thing here is that as a hobby, you will report the income on line 21 of your US tax return.

    You might be able to claim the expenses on your Schedule A–but they’re subject to a 2% floor of your adjusted gross income. (Translation–you won’t get to deduct the full expense if at all.)

    But that’s okay, you’re doing this because you love to do it. And that’s okay.

    The only thing wrong with mentioning prices on the internet is that you will be expected to honor that price for a period of time even after you remove the price. I don’t know all the rules about that, you’ll want to check that out somewhere else.

    So, should you worry about being called a business? I say no. If the IRS does decide to call you a business, I’m thinking they’ll be sorry because your costs clearly exceed the expenses and they’d wind up having to give you money.

20. Hi Jan,

    I started breeding dogs 14 years ago in both Germany and the UK. It has always been a hobby and certainly never left a profit under the bottom line. During those years I bred less than one litter a year.

    I show, I health test and I only have 3 dogs living with me of which one is long retired and the other one “just a Pet”. I Co-own dogs who live with Pet owners and will allow me to use them for one litter. Dogs that I use at stud are usually sourced via artificial insemination and Semen is bought from European breeders in order to be able to keep my lines going.

    I am also a dog show Judge and have been head of the breeding department in my German Club. For this reason my main aim of my website as well as another Dalmatian related website – http://www.luadalmatians-world.com is to provide solid information about the breed and not to make a profit.

    In the countries I have previously lived there was no need for me to ever keep receipts as I never bred enough and if I did I spend a lot of money on the breeding and therefore it was clear that not profits where achieved.

    We moved to the States in 2012 and I am planning to raise my third litter in 2015 since my arrival. For the last litter I bought a dog in Germany and had it flown to the States, for the upcoming litter I am planning to import Semen.

    My question to you is if I need to worry about being “called” a business? Do I need to proof one day, that I do not make money but that I am passionate about this hobby? Is it OK to mention prices on the website?

    Thank you in advance for you time!

21. Hi Debbie,
    Generally, if you’re filing a Schedule C, you’re claiming a cash basis accounting system. So, if the puppies die, you haven’t already claimed that income on your tax return. So you can’t claim a loss when they die at birth.

    Now if you’re doing an “accrual method of accounting” that is, you’re claiming the income from orders people have placed and paying tax on that income, then you can deduct the loss because you already claimed the income. See the difference?

    I’m guessing that you’re using cash basis accounting. That’s the default on a schedule C. Beside, who would want to claim income on puppies that haven’t been born yet?

    So, no, you can’t deduct a loss for them.

    I’m sorry about the loss of the puppies. I know it’s a business, but it’s still hard to deal with.

22. If a dog breeder files a Schedule C, can they take a deduction for dog infants lost at birth?

23. Hi Beth,
    First and foremost, I’m going to give you the link to Farm taxes, it’s called Publication 225. http://www.irs.gov/pub/irs-pdf/p225.pdf

    I want to make sure you have the whole publication. Sometimes, when I’m trying to find something about farming, I’ll get a portion of the book and it won’t have the section I’m looking for. You should download this to your computer and have it accessible because this has a lot of farm answers in here.

    Since this is the first year you’re actually filing a Schedule F for the farm, I recommend hiring a tax professional with farm experience to make sure that you get every deduction you’re allowed to take. My gut feeling here is that you’ve got more to depreciate than just the livestock and dogs. It will be worth the money to find a good enrolled agent and do a sit down. Even if you’re skyping with someone.

    The lambs that were bred and sold this year are ordinary income on your Schedule F.

    The ewes that were raised by you but being used for breeding purposes are treated differently. You don’t depreciate them, but you do expense their feed and care. When you sell one of these ewes, it goes on form 4797. If you held the ewe for less than 12 months, you’d report it in part 2 and pay ordinary tax rates on her. If you had her for over 12 months (which I’m guessing would be all of them) then you’d report the sale of that ewe on part 1 and pay capital gains tax on her. Here’s a link to a form 4797: http://www.irs.gov/pub/irs-pdf/f4797.pdf

    But your question is about the puppy. The puppy was purchased for draft purposes but he never made to an age where he could be used. That’s the key with livestock purchased for working purposes–you can’t begin to write them off until they reach an age where they can work. I’m sorry but my opinion is that you won’t be able to expense the cost of the pup that died.

    The replacement pup will be able to be depreciated once he is “active”. Once the dog is trained and can actually perform the work that’s required of him, you may begin to depreciate him. The depreciation time for a dog is 7 years. The depreciation time for sheep is 5 years.

    Good luck.

24. Hi there. I have a couple of questions. One related to livestock guard dogs and one related to the livestock. My family has lived on a farm for the past 5 years. When we first moved here my father-in-law had a handful of Katahdin sheep. Over the last 5 years we have basically taken over the flock and increased its size to 70 ewes (through retention of the ewe lambs each year). This is the first year that we will be filing a Schedule F claiming the income and expense of the farm. We purchased a Great Pyrenees pup in April to train to guard the sheep (there are already 2 grown Pyrenees dogs (approx. 12 years of age) that have been here for many years). Unfortunately, the pup died in July – we’re not sure what caused it – and we ended up getting another Pyrenees pup. He is now about 7 months old. Question: how do we handle the cost of the two pups? Can we deduct the cost of the pup that died? Do we need to depreciate the cost of the remaining pup?
    Also, since we did not purchase the ewes, should we be depreciating them? If so, should the value be based on what would typically be spent to buy a breeding ewe? All of the ewes in the flock have been through at least one lambing season – we did not keep any of the ewe lambs from our 2013 season.
    I appreciate any feedback you are able to give!

25. Hi Michael,
    Dogs that are purchased for breeding can’t be depreciated (or expensed) until they are able to breed. So, if you purchased puppies, you can’t claim the cost until they’re ready for breeding.

    So here’s my question for you. Do you have a hobby or a business? As a hobby, you only claim regular tax on the income–unlikely that you’ll be able to write off expenses but there’s another post about that.

    As a business you’ll pay self employment tax. But you will be able to write off the costs associated with the breeding and care of the litter.

    Here’s some information about hobby vs. business that might help: http://robergtaxsolutions.com/2010/10/business-or-hobby/

    Bottom line though–you can’t write off the new dogs until they’re of breeding age.

26. Hi, I purchased a French Bulldog female in 2012 and in April of 2013 she had her first litter and I made a decent amount of profit for the litter, surpassing my initial investment by a lot. So between April and now I have purchased a male and another female for future breeding. My question is this: If I bought the two dogs with the profit from the first litter does that cancel my total profit for the year even if the two new dogs are not a part of my breeding program yet?

27. Hi Cam,
    I would roll the expenses to 2013 as “start up costs” so that you have an offset against the revenue from the puppies. I think that makes a lot of sense.

28. Hi Christina,
    I’m sorry for the loss of your dog. I see by your email address that you definitely do have a breeding business. Just as a heads up to people who want to have a business–a website gives you a little more “proof of business”.

    So you already claimed half of the cost of your dog on your 2011 return. So, forgive my choice of language, I’m wording it in business terms–you already capitalized half of the expense. So, you’re talking about a $10,000 breeding bitch and you already claimed a 50% deduction. So, you can only claim a loss on the $5,000 remaining basis.

    If I’m misunderstanding, and you haven’t already written off the first $5,000–then you would write off the entire amount that hasn’t already been depreciated in 2012.

    (I bet those puppies are adorable.)

29. Hi Catherine,
    You question whether you can claim your half bulldog/half lab as a guard dog for your business. Here’s my gut reaction–you can argue it, but my gut reaction is–what’s he going to do if you’re attacked? Lick the guy to death?
    I’m not trying to be flip, I could be wrong, but bulldog/lab as a guard dog is pretty unusual. Yes, he looks frightening, but you yourself say that he’s friendly.
    So, how would you document his guard dog training? Has he had any? Really, what would happen if you were attacked? Would he defend you? Would be provide a formidible defense?
    Remember, claiming a dog on a tax return is going to be a flag to begin with, so before you try to claim your dog, you want to be pretty confidant that you’d survive the audit. So, let me ask you this, if an IRS agent came to your house to investigate your guard dog claim; what would your dog do? If the answer is–he’d make the IRS agent have an accident in his pants–I say go for it. Otherwise, I’m leaning against claiming your dog. Sorry.

30. Hi Denny,
    I just had the privilege of meeting two wonderful therapy dogs the other day. We were having a nasty storm in St. Louis (again) and their owner (caretaker?) had brought them into my office building for shelter. Wow! I got the opportunity to pet them. Storms turn me into a basket case and I suddenly felt much better. I knew that therapy dogs were helpful, but I never expected that they could help me.
    Anyway, you have a situation where you’re going to have a working dog that is also a pet. You’ll want to be very careful–you’ll want to allocate the percentage of “pet” time versus the percentage of “therapy” time and allocate the expenses accordingly. If your wife is an employee, then the expenses will go on a form 2106 instead of on a schedule C like someone who is self-employed.
    Of course, any expenses that are strictly for the therapy work–like the therapy trianing classes, would be 100% attributable to the job.

31. Hi Ruth,
    Now that your business is an LLC, it’s still perfectly fine to file your taxes on a Schedule C. Actually, that’s probably the best solution for you.
    You could probably make an argument for a schedule F, but it really wouldn’t make a difference for your taxes and I think the IRS would prefer you did a Schedule C anyway.
    Sadly, there’s no tax benefit to your age either. (Sorry.)
    Now about filing separate–you mentioned Missouri–so, it might be to your advantage filing separate anyway (for some people with pensions, it works better.)
    But, if you and your husband are on good terms, and you want to file together–you can–just list him as a non-resident. (Run your taxes both ways to see what works best for you.)

32. Hello! I purchased an adult bitch to breed in 2012. After her purchase, I had her vetted and then she was bred and had her litter on puppies on December 29, 2012. The puppies weren’t able to be sold, of course, until they were 8 weeks old and that was in February 2013. In 2012, I had costs to purchase the bitch, have her vetted and then, of course, her regular care (food, grooming, etc). So, I have zero revenue for 2012, but I sold her puppies for a total of $4250…but that was in 2013. So, can I roll all of the expenses from 2012 into my 2013 return when I am able to also claim the revenue from the puppies to offset that income? OR should I go ahead and claim the expenses on the 2012 taxes and then any additional expenses incurred in 2013 along with the revenue on the 2013 return? (I apologize if I made no sense here).

33. Hi there, I just started my breeding business in 2011. I had my first litter in 2012. I lost my female in a hit and run late 2012. she cost me 10K. 5 was paid in 2011 which was claimed as a loss. the other 5000 was paid in 2012 after my first litter. Do I claim her total cost as a loss for 2012? It kills me to even think this but reality is what it is. Any advice?

34. Hello,

    Thanks for such a helpful article/forum. I’d like to get your advice on my situation if you’re still available through this avenue.

    I work from home in a secluded canyon in the mountains. We purchased our dog as a protector for me since my husband often works early/late away from the home. Our dog is half bulldog, half lab. Although he’s actually very friendly, his look and stature is quite frightening for people who do not know him. As a side note, twice this year he’s had major surgery to remove foreign objects totaling about $10k.

    1. Does our dog qualify as an actual tax deductible guard dog?
    2. Can those surgery expenses be included in our taxes?
    3. Do we need to have a note of sorts from our veterinarian/surgeon declaring our dog as a guard dog?

    Any advice/guidance would be greatly appreciated. Thank you!

    Best,
    Catherine

35. Hi,
    My wife is a professional counselor (finishing up her her internship currently) and works with a group of counselors out of a dedicated office. We just got a puppy that she plans to use as a therapy dog at the office.
    What are our options for tax write-off for the pup? He’ll live with us and also be our family dog, but he will join her at the office on a “regular” basis and for certain clients (especially children) I believe he is a “necessary” part of their treatment.
    Any thoughts?
    Thank you!
    Denny

36. I have been breeding dogs on my 2 1/2 acre “dog ranch” for 12 years. I am USDA and state licensed. I have always filed as a sole proprietor, but this year became an LLC, sole owner. Do I need to change anything on my current tax return? I use Turbo Tax business software and somehow I always get routed to schedule C. Should I be using sched F? Does it matter as long as I’m listing feed and vet expenses under “other”? FYI, I sell on a pet broker website to pet stores across the US. I discovered your website by accident and am so grateful for all your info. Thanks so much!

    Also, FYI, I have shown a modest profit the past 2 years. I turned 70 in June 2012 and wonder if there are any tax benefits connected with my age. I have always filed married, but my husband is no longer in MO so I am filing married, seperate.

37. Hi Mike,
    You pretty much hit the nail on the head when you said that your dogs are a hobby. You can write off hobby expenses up to the amount of the income on your Schedule A.

    That could make writing off the expenses a worthless deduction. Here’s why: Let’s say you sell some puppies for $1000 and you easily have $1000 worth of expenses. First, in order for your deduction to count, the expense has to be over 2% of our adjusted gross income. Let’s say you make $50,000 a year–2% of that is $1000. Oops, no deduction at all.

    But lets say you sold the puppies for $2000 and had $2000 worth of expenses. Well then you’ve got $1000 deduction. But–if you don’t have enough other deductible items in your Schedule A–like mortgage interest and real estate taxes, then you’ll still be better off with claiming the standard deduction.

    On the plus side. Hobbies are fun! And, when you do sell puppies, you can claim the income on line 21 of your tax return which means you pay no self employment tax.

    In your situation, you’re probably best off just claiming the income as hobby income.

38. Hi Arthur,
    In part one of this series I said that there were two places you could claim a dog–as a business expense or a medical expense. You just showed me that I’m wrong–I think your case is a charitable donation.
    You’re not really going into business here, you say nothing about making money doing this. You’re talking about helping people, volunteering, etc.
    I would claim your expenses as a charitable contribution to your service organization. Be realistic–what percentage of those expenses are really for the charity. Clearly the training. But come on–you’re getting a golden puppy. He’s really of no use to the organization until he’s trained. (I could be wrong about that, just thinking of a golden retriever puppy is making me feel better already–there’s something to it.)

    Now if you want to start a business where you have people pay for your dog service–then you’d be writing it off as a business expense. But you clearly couldn’t claim your puppy expenses as a business expense because your dog clearly isn’t ready to hire out yet.

39. Hi Eric,
    It sounds to me like you’ve got a good case for claiming your dogs. And, they would be claimed like livestock.

40. I breed, raise and train show dogs purely for my pleasure. I only do a litter every few year, and always keep a pup for my own breeding program and training interests. Since my breed tends to have small litters, I really do not make a profit, so I have always considered this purely a hobby. I am not really sure what expenses I can claim to write off the litter incomes down to 0. I do extensive health testing on my dogs, but that is ususally in the years before I actually breed them and I may or may not have a litter in that year. My show results are why people buy my dogs, but in the year that a particular bitch is bred, she may or may not have been out in the show ring. Can I write off the showing of other dogs that years as essentially advertising? I assume I can write off all the vet expenses for the delivery and management of the litter. Can I write off food? What about for the retired bitches, who are still being shown and making our kennel name known to people who are looking for my breed of dog? Thanks for posting this interesting (and confusing) topic.

41. Hello and thank you for your time! my Fiancee and I are getting a new golden retriver puppy, we have been volunteering with an orgazination that trains service dogs. We are purchasing with the intention to get him/her trained to be a therapy dog to take our dog to hospitals, senior homes, homes of persons with disabilites. Is this a business and how can we structure it to be a home based business helping those in need? The purchase will be 2-3000, the vet bills and micro chip will be 3-500. We will be purchasing special alkaline free organic food (because my fiancee suffered the loss of her dog 7 years ago to cancer) we really want to make an impact in the lives of those who need relief from stress and pressures from their disabilites. Can you help give us direction please? THANK YOU and God Bless.

42. We have a farm and file a schedule F. We also on a small scale buy and sell dogs for Schutzhund and police training. Can these dogs be considered “Livestock” on the schedule F? And therefore the cost basis, feed and vet care be deductable on the Sch F?

43. We’ve had a farm Schedule F for several years now.

    In 2011 we started selling registered puppies. My question is: Is this new puppy selling business also considered a separate Farm or a new business?
    For our 2011 taxes I claimed it as a farm on a schedule F.
    For our 2012 taxes do I need to change this to a business expense on schedule C instead? and not fill out a schedule F?
    Thank you!

44. Thanks so much for the quick reply! Yes, I will include it as part of my charitable contributions. I do have all the documentation and receipts. My Dad was a tax guy back in the day which is why I was born on Dec 31 and why I keep good records. 🙂

45. @ Morgan,
    I think I understood you correctly the first time–your dog expenses are deductibel on Schedule A for charity, not as a 2106 expense (because you have no income from that work.)
    I think that’s what you meant anyway, but I wanted to clarify to make sure.

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