<p>O.K. I think I'm about to get hammered here. It appears that if I have a taco stand and a lemonade stand (both schedule C 1040 line 12) I can write off (deduct) the loss from tacos against lemonade. But what if I have a schedule C 1040 line 12 taco stand and a schedule F 1040 line 18 farm/ranch? </p>
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I have a + on line 12 and a - on line 18 ( which still leaves a substantial +) .</p>
<p>Anybody been here before? or am I the only person who gets the joy of not having the income but paying as if I do?</p>
<p>The two offset one another. If you combine lines 12 and 18 and come up with a negative number, then put down 0. If you combine 12 and 18 and come up with a positive number, then put down the positive number.</p>
<p>My goodness, an actual answer. LOL. That of course is what makes logical sense but it was that "or" that was getting me. Two more if you have the time . </p>
<p>What about if the ranch loss is 60% depreciation, 40% actual cash out of pocket (do they disallow the deduction) and is it treated different for fafsa and profile? </p>
<p>And what is a person supposed to put down for value of home if the home is in the middle of hundreds of acres of ranchland and can't be divided or sold (no road) without adding 50 or more stupidly configured acres to it which include all the barns, etc.? I chose to just use section P on the profile to give facts and figures on costs of construction of the cabin, and told them I included it in the ranch value as it legally can't be carved out and the debt is on the ranch itself (not the cabin) so there is zero home equity. I just know there is a farmer in the same predicament somewhere. (Doesn't matter for fafsa.)</p>
<p>Thanks Scott, I have really appreciated you helping out. I think everybody should check out your homepage. Pretty interesting stuff there. I will be downloading within ten minutes. LOL.</p>
<p>As much as it seems like filing a FAFSA or Profile is much like presenting an offering at the altar of some mysterious god, the folks at FAFSA and Profile and the colleges are not accountants and are not in a position to make accurate evaluations of your assets. Only you and your accountant are truly in that position.</p>
<p>What is important is that you provide a reasonable valuation. Including depreciation in a business valuation is a very standard practice. Any FAO that would argue with that probably never took an accounting class.</p>
<p>As to your house question... Here in the midwest the house is normally considered the dwelling and about two acres. That's a pretty standard rule of thumb. Outbuildings are not normally included in the house value but are part of the farm. Of course, rules of thumb do not always apply.</p>
<p>On depreciation, my D's finaid counselor at Berkeley told me they add back into our income any depreciation on biz equipement as well as the home office deduction...no one else has mentioned that specifically, but it may be worth checking at each school.</p>
<p>Sorry, no knowledge of the farm dilemma, but I'll be watching you and learning :) Can you consider the value of the entire property as the home value? I do not recall how big your "spread" is, but if it is not splitable, what can you do.</p>
<p>I would advise you to talk to the schools a bit, choose the advised method which is most advantageous to you (but still honest obviously) and make notes on what you assumed & why, then you can be consistent over the years.</p>
<p>This stuff can be confusing and it is really helpful in complex situations to keep a record of what made up which numbers and what your assumptions are, both for explaning to the finaid people and to be consistent the next year!</p>