You own a farm several hours from your home and an aunt has a life estate for half the income and if you need to purchase something for the farm such as a lawnmower is this a personal or farm expense?

Answer:

It depends on how the farm is used to generate income, and how exactly the mower will be used. If the entire acreage is used for the farm business (that is, no one resides there or uses the space for recreation, and you generate income from the property), then the mower should be deductible as a business expense, provided you keep it at the farm.

Many people think that farmers only use tractors, and grass mowers are used just by homeowners. This is not necessarily true, as farmers need to mow the areas around their fields or pastures where a tractor cannot go. We have a farm where we board horses, and we have a riding mower that we use to mow the fence lines. We deduct it as a business expense.

You're aunt's income isn't really related, assuming that she gets half the net income from the farm...in other Words, after the expenses are subtracted and the taxes are completed, she will receive half the profits. If she is an active partner in the business, that would be more complicated.

Incidentally, you might want to consider getting an accountant. My husband and I found that we actually saved money having an accountant do our taxes for the farm, because he found expenses that we weren't counting. It costs us about $200 a year for our personal and Business Taxes for federal, state, and local.