Tools of the trade

[325Falcon]

I have 1 full time job. I also have what I consider my second job.

For the past 3 years I have planted a good size market garden and have been selling at the local Farmers Market and a small stand in front of my home, I have not made any profit, in fact I have probley lost $$$. Man thats a hard dollar to earn.

Can I use the tools of the trade exemption for tools and equipment related to this "second" trade?

[B12]

Keep an income statement as you would any small business with income and expenses. If you want to do it yourself, there is plenty of online help and examples of business statements.

Keep good records and all receipts. Depending on when you are filing, do a profit and loss statement quarterly or else just do one for the year ending 12-07. Get a little sales book and record all sales.

Not only will your tools be an expense but you can depreciate them. But...find out if your state has tools of the trade exemption. Even if it doesn't, who would want some old rakes and hoes!

Don't forget expenses like traveling to the market and bank for deposits, seeds, fertilizer, etc.

If the business has a loss at the end of the year, you can offset it against your regular income. If you are serious about keeping it up, get a ficticious name and be a sole prop. Happy gardening.

[keepmine]

You got a hobby, not a business.
If you have a routine run of the mill bk, don't complicate it by throwing a money losing hobby into the mix. Unless you have an expensive John Deere tractor, I'd just let it go. Lump the rotor tiller,etc. into your personal property.
BTW, nothing wrong with losing money in gardening. My uncle has a monster garden he works year around.Gives him something to do he enjoys and he keeps friends and family in fresh veggies.

[325Falcon]

Yep its a hobby.

Any tools of the trade exemption ($5000) not used may be taken as personel property exemption. So I am good with regard to this stuff.