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LLC hunting club, yes or no? #2381894
01/22/18 07:55 AM
01/22/18 07:55 AM
Joined: Nov 2017
Posts: 24
Muscadine, AL
JPP101 Offline OP
spike
JPP101  Offline OP
spike
Joined: Nov 2017
Posts: 24
Muscadine, AL
Guys, any help on this would be appreciated. Just leased some new land for next year, with a new club, and will need to purchase a lot of new/used equipment to work the land and hunt, for the club. My question: Is it in our benefit to LLC our club and potentially get tax right offs for gear(stands, feeders, utvs, etc) and insurance, or do I have this completely wrong? Someone mentioned it to me, and just wanted some board feedback any. I have a meeting with my CPA this Friday and was going to bring it up to her. Thanks!

Re: LLC hunting club, yes or no? [Re: JPP101] #2381940
01/22/18 08:32 AM
01/22/18 08:32 AM
Joined: Oct 2007
Posts: 1,708
Opelika ,AL
bwhunter Offline
8 point
bwhunter  Offline
8 point
Joined: Oct 2007
Posts: 1,708
Opelika ,AL
I don't think it would make sense to setup an LLC for a hunting club. They are designed for liability protection more than to help with taxes and I'm not sure how you would setup a hunting club as a business. Just don't see how that would help you at all.

Re: LLC hunting club, yes or no? [Re: JPP101] #2381942
01/22/18 08:33 AM
01/22/18 08:33 AM
Joined: Oct 2007
Posts: 1,708
Opelika ,AL
bwhunter Offline
8 point
bwhunter  Offline
8 point
Joined: Oct 2007
Posts: 1,708
Opelika ,AL
It also cost us $700 to set one up for a possible business adventure.

Re: LLC hunting club, yes or no? [Re: JPP101] #2381950
01/22/18 08:38 AM
01/22/18 08:38 AM
Joined: Jan 2005
Posts: 33,437
Your mom’s house
doekiller Offline
Freak of Nature
doekiller  Offline
Freak of Nature
Joined: Jan 2005
Posts: 33,437
Your mom’s house
I am not an accountant. But, I don't think a LLC is not going to have any tax advantages for you in this situation.

LLCs have flow through taxation. So, you don't get any benefit you would not be getting anyway. You can only write off expenses like tractors and such if you have a business. You can't write off items for a hobby. So, unless the LLC is a business and you are attempting to make money, you have no deductions. If are making money, then you are going to have to declare that as business income and pay taxes on it. The IRS will not let you get away with an LLC not making money for very long before you are audited.

Re: LLC hunting club, yes or no? [Re: doekiller] #2381954
01/22/18 08:40 AM
01/22/18 08:40 AM
Joined: Nov 2011
Posts: 21,751
USA
R
Remington270 Online content
Freak of Nature
Remington270  Online Content
Freak of Nature
R
Joined: Nov 2011
Posts: 21,751
USA
Originally Posted By: doekiller
You can't write off items for a hobby.


Bingo. Lots of people think you can write off hunting land/cabin as a "farm". You can, until the IRS audits you, then you'll have to pay it all pay plus interest.

Re: LLC hunting club, yes or no? [Re: JPP101] #2381998
01/22/18 09:14 AM
01/22/18 09:14 AM
Joined: Sep 2002
Posts: 3,237
Sterrett, AL, USA
stkshtr Offline
10 point
stkshtr  Offline
10 point
Joined: Sep 2002
Posts: 3,237
Sterrett, AL, USA
You have to prove you make "X" amount of money a year off the hunting property (formula depends on certain criteria) and you also have to take a certain number of clients a year to write off items for tax deductions. Our place is set up that way but it's because it's not a "club", it's a business entertainment (like taking customers to play golf) and it's a large amount of money you have to prove you get back in return from "business earned" by getting business from those customers.


CISM- Firefighter Chaplain-C.E.R.T. Instructor
Refuel Ministries-HAM (KM4LBG)
Re: LLC hunting club, yes or no? [Re: JPP101] #2382104
01/22/18 10:40 AM
01/22/18 10:40 AM
Joined: Apr 2013
Posts: 4,609
Alabama
R
Rmart30 Offline
10 point
Rmart30  Offline
10 point
R
Joined: Apr 2013
Posts: 4,609
Alabama
The LLC is more of a liability protection for whoever is signing the lease. Anyone who signs their name on a lease with the litigious society we live in today needs at least a liability umbrella policy for themselves. Even if its just a small lease with 4 of your best buddies who would never sue you. They may not but what about their spouses? Parents? Kids? Even thru no fault of your own if a accident occurred there are always vultures circling if they think money is to be made. I have seen 2 different clubs get sued when a death occurred at no fault of theirs. Neither lost the lawsuit but they still had to pay lawyers fees etc.


From CPA I was told when doing a club to run all club financials thru a separate account and it had to be shown on taxes.
I was told the account should always almost zero out at the end of the year and to save all related receipts.
As far as deductions I was told everything is a expense. ie seed, shooting house materials, diesel fuel,gates etc.
If a tractor is bought it comes out of the account as a expense.
Im not sure what the technical difference is between a expense and a deduction and thats why I pay a CPA.
I do know that you cannot claim a loss on a hobby account.


From the IRS website.
IRS Tax Tip 2017-80, November 21, 2017

From scrapbooking to glass blowing, many Americans enjoy hobbies that are also a source of income. A taxpayer must report income on their tax return even if it is made from a hobby.

However, the rules for how to report the income and expenses depend on whether the activity is a hobby or a business. There are special rules and limits for deductions taxpayers can claim for hobbies. Here are five things to consider:

Determine if the activity is a business or a hobby. If someone has a business, they operate the business to make a profit. In contrast, people engage in a hobby for sport or recreation, not to make a profit. Taxpayers should consider nine factors when determining whether their activity is a business or a hobby, and base their determination on all the facts and circumstances of their activity.
For more about ‘not-for-profit’ rules, see Publication 535, Business Expenses.

Allowable hobby deductions. Taxpayers can usually deduct ordinary and necessary hobby expenses within certain limits:

Ordinary expense is common and accepted for the activity.
Necessary expense is appropriate for the activity.
Limits on hobby expenses. Taxpayers can generally only deduct hobby expenses up to the amount of hobby income. If hobby expenses are more than its income, taxpayers have a loss from the activity. However, a hobby loss can’t be deducted from other income.

How to deduct hobby expenses. Taxpayers must itemize deductions on their tax return to deduct hobby expenses. Expenses may fall into three types of deductions, and special rules apply to each type. See Publication 535 for the rules about how to claim them on Schedule A, Itemized Deductions.
Use IRS Free File. Hobby rules can be complex, and IRS Free File can make filing a tax return easier.


Ethical behavior is doing the right thing when no one else is watching - even when doing the wrong thing is legal. Aldo Leopold .. (except when it comes to trailer tags)
Re: LLC hunting club, yes or no? [Re: JPP101] #2382133
01/22/18 11:18 AM
01/22/18 11:18 AM
Joined: Sep 2016
Posts: 7,946
Alabama
Shaneomac2 Offline
14 point
Shaneomac2  Offline
14 point
Joined: Sep 2016
Posts: 7,946
Alabama
so can i write off my fishing tackle ?


Georgia Football..Acts like Bama but has a trophy case like South Carolina.
Re: LLC hunting club, yes or no? [Re: Shaneomac2] #2382154
01/22/18 11:43 AM
01/22/18 11:43 AM
Joined: Aug 2003
Posts: 41,955
UR 6
top cat Offline
Freak of Nature
top cat  Offline
Freak of Nature
Joined: Aug 2003
Posts: 41,955
UR 6
Our place is not a "Hunting Club" per say, we own it but we are Incorporated as a class S.

Last edited by top cat; 01/22/18 12:09 PM.

LUCK:::; When presistence, dedication, perspiration and preparation meet up with opportunity!!!
- - - - - - - -A government big enough to give you everything you want, is big enough to take everything you have. Thomas Jeferson - - - - - - - -
Re: LLC hunting club, yes or no? [Re: JPP101] #2382187
01/22/18 12:06 PM
01/22/18 12:06 PM
Joined: May 2011
Posts: 20,017
PDL, Fl
T
timbercruiser Offline
Freak of Nature
timbercruiser  Offline
Freak of Nature
T
Joined: May 2011
Posts: 20,017
PDL, Fl
We had a tract of land that was bought by Potlach (I think), and when they sent the lease out it required us to form an LLC. We dropped the tract.

Re: LLC hunting club, yes or no? [Re: JPP101] #2382200
01/22/18 12:20 PM
01/22/18 12:20 PM
Joined: Sep 2006
Posts: 2,685
West Florida
westflgator Offline
10 point
westflgator  Offline
10 point
Joined: Sep 2006
Posts: 2,685
West Florida
If you are going to form anything, I would think it would be a non-profit with everything spelled out in the by-laws and policies and procedures on how you are going to operate, and i would include an article that explains how disputes and litigation would be handled. I would also indemnify the officers and Trustees for their protection. As far as the tax benefits, I don't see an LLC helping with that either.

Re: LLC hunting club, yes or no? [Re: JPP101] #2382286
01/22/18 01:13 PM
01/22/18 01:13 PM
Joined: Feb 2014
Posts: 1,169
Tuscaloosa, Ralph,Fosters
Turkeyboy Offline
6 point
Turkeyboy  Offline
6 point
Joined: Feb 2014
Posts: 1,169
Tuscaloosa, Ralph,Fosters
If u are looking for a tax deduction, look at your club fees. Take business clients as guests, document and talk with your accountant about writing off part. If there is no hunting fee, use your land lease fees the same way.

Last edited by Turkeyboy; 01/22/18 01:14 PM.

The Earth is Gods footstool
Re: LLC hunting club, yes or no? [Re: JPP101] #2382409
01/22/18 02:30 PM
01/22/18 02:30 PM
Joined: Nov 2016
Posts: 799
Lower AL
C
Cynical Offline
4 point
Cynical  Offline
4 point
C
Joined: Nov 2016
Posts: 799
Lower AL
The bottom line is you have to have a profit motive before you can claim expenses as deductions. That's the general point being made by others above.

Re: LLC hunting club, yes or no? [Re: Turkeyboy] #2382676
01/22/18 05:21 PM
01/22/18 05:21 PM
Joined: Dec 2008
Posts: 3,855
dothan
eskimo270 Offline
10 point
eskimo270  Offline
10 point
Joined: Dec 2008
Posts: 3,855
dothan

Originally Posted By: Turkeyboy
If u are looking for a tax deduction, look at your club fees. Take business clients as guests, document and talk with your accountant about writing off part. If there is no hunting fee, use your land lease fees the same way.
according to my accountant this is a red flag and might encourage an audit


Super Predator
Re: LLC hunting club, yes or no? [Re: JPP101] #2382800
01/23/18 01:51 AM
01/23/18 01:51 AM
Joined: Sep 2002
Posts: 3,237
Sterrett, AL, USA
stkshtr Offline
10 point
stkshtr  Offline
10 point
Joined: Sep 2002
Posts: 3,237
Sterrett, AL, USA
Don't see how you could run it as a non-profit unless you are providing a service free of charge. You would also have to show there is a paid membership. Possibly a not-for-profit. I'm not an accountant but have listened to how people do their properties over the years. I run a non-profit but it has nothing to do with hunting.


CISM- Firefighter Chaplain-C.E.R.T. Instructor
Refuel Ministries-HAM (KM4LBG)
Re: LLC hunting club, yes or no? [Re: JPP101] #2382966
01/23/18 05:02 AM
01/23/18 05:02 AM
Joined: May 2014
Posts: 2,472
All Over The Place
Runningdeer Offline
10 point
Runningdeer  Offline
10 point
Joined: May 2014
Posts: 2,472
All Over The Place
Is it a hunting club or a "farm"? wink It always amazes me how a simple play on words can make such big differences.

Last edited by Runningdeer; 01/23/18 05:03 AM.
Re: LLC hunting club, yes or no? [Re: JPP101] #2383006
01/23/18 05:31 AM
01/23/18 05:31 AM
Joined: Sep 2002
Posts: 3,237
Sterrett, AL, USA
stkshtr Offline
10 point
stkshtr  Offline
10 point
Joined: Sep 2002
Posts: 3,237
Sterrett, AL, USA
I was in a club in Fayette and our place was called a sportsman's club instead of deer hunting club. Don't remember why they set it up that way but I think it had something to do with liability.


CISM- Firefighter Chaplain-C.E.R.T. Instructor
Refuel Ministries-HAM (KM4LBG)
Re: LLC hunting club, yes or no? [Re: eskimo270] #2383501
01/23/18 11:59 AM
01/23/18 11:59 AM
Joined: Sep 2006
Posts: 2,685
West Florida
westflgator Offline
10 point
westflgator  Offline
10 point
Joined: Sep 2006
Posts: 2,685
West Florida
Originally Posted By: eskimo270

Originally Posted By: Turkeyboy
If u are looking for a tax deduction, look at your club fees. Take business clients as guests, document and talk with your accountant about writing off part. If there is no hunting fee, use your land lease fees the same way.
according to my accountant this is a red flag and might encourage an audit


THIS ^^^

Re: LLC hunting club, yes or no? [Re: stkshtr] #2383505
01/23/18 12:03 PM
01/23/18 12:03 PM
Joined: Sep 2006
Posts: 2,685
West Florida
westflgator Offline
10 point
westflgator  Offline
10 point
Joined: Sep 2006
Posts: 2,685
West Florida
Originally Posted By: stkshtr
Don't see how you could run it as a non-profit unless you are providing a service free of charge. You would also have to show there is a paid membership. Possibly a not-for-profit. I'm not an accountant but have listened to how people do their properties over the years. I run a non-profit but it has nothing to do with hunting.


It's a Not For Profit Organization. You don't have to be a charity or a church to be a non-profit. You are collecting fees simply to cover the organizations expenses and those fees grant the members of that organization certain privileges. The organization's purpose is not for business and not for profit. However, the fees would not be tax deductible.

Re: LLC hunting club, yes or no? [Re: JPP101] #2383584
01/23/18 01:32 PM
01/23/18 01:32 PM
Joined: Nov 2017
Posts: 24
Muscadine, AL
JPP101 Offline OP
spike
JPP101  Offline OP
spike
Joined: Nov 2017
Posts: 24
Muscadine, AL
Great feedback and info here. Thanks! I'm going to bring it up to my CPA, and she what she says.

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