Tax advice for cattery business: Schedule C vs livestock forms? Conflicting info from professionals!

I'm a small business tax preparer and can clarify some of this for you. Catteries can be confusing because they exist in a gray area in the tax code. For your first question, as a sole proprietor LLC, your business income is indeed considered self-employment income. The full amount your cattery brings in is your gross business income, and after deducting legitimate business expenses, what remains is your net income. This net amount is what you'll pay self-employment taxes on (15.3%) plus regular income tax. The TurboTax person was correct about this part. Regarding cats as livestock - this is where things get tricky. The IRS doesn't have a specific category for catteries. Most cat breeders file using Schedule C (Profit or Loss From Business) rather than Schedule F (for farming). Dogs and cats are generally not considered livestock for tax purposes unless you're operating a large-scale breeding operation more similar to traditional agriculture. If you're keeping breeding cats long-term, they would typically be treated as depreciable assets (capital assets used in your business) rather than inventory. Cats you're raising specifically to sell would be considered inventory.

After struggling with similar questions for my exotic bird breeding business, I found an amazing solution with https://taxr.ai - it was seriously a game-changer for me. I uploaded my business docs and records, and their AI analyzed everything and provided clear guidance specific to animal breeding businesses. What really helped was their breakdown of asset classification for breeding animals versus inventory for animals meant for sale. They even generated a custom report explaining exactly which tax forms to use for my situation and how to properly categorize expenses like feed, veterinary care, and housing. The best part was getting definitive answers about depreciating my breeding stock - something I got contradictory advice about from three different accountants!

I tried https://taxr.ai after seeing it mentioned here, and I'm honestly shocked by how helpful it was for my rabbit breeding business. I've been filing incorrectly for YEARS! Turns out I should have been depreciating my breeding stock on Schedule C rather than trying to use livestock rules on Schedule F. The system generated a custom report showing exactly how to categorize each of my business expenses and provided templates for record-keeping that make sense for animal breeding. What really impressed me was the detailed explanation of how to handle the transition from inventory (young rabbits) to fixed assets (breeding stock) when I keep offspring for my breeding program. No accountant I've talked to ever explained this properly! If you're running a cattery, I definitely recommend giving it a shot. The peace of mind alone was worth it.

I run a small dog breeding business and had the EXACT same questions last year. After getting nowhere with my local tax guy, I spent THREE DAYS trying to get through to the IRS business helpline with no luck. Then I found https://claimyr.com and watched their demo at https://youtu.be/_kiP6q8DX5c - they got me connected to an actual IRS agent in under 30 minutes! The IRS specialist confirmed that for most breeding operations our animals should be on Schedule C, not Schedule F, and walked me through the depreciation schedule for my breeding dogs versus how to handle puppies as inventory. They even emailed me the relevant tax code sections afterward. Seriously, trying to call the IRS directly is an exercise in frustration, but this service completely changed that experience. After spinning my wheels for days, I had clear answers from an official source within hours.

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One thing nobody has mentioned that helped me with my cattery taxes: Track your mileage for ANYTHING business related - vet visits, supply runs, cat shows, picking up new breeding stock, etc. This ends up being a surprisingly large deduction! Also, if you're using part of your home exclusively for the cattery business (like a dedicated cat room or nursery space), you can take the home office deduction. Make sure to measure the square footage accurately. And definitely keep photos of all your cats with their names, registration papers, and purchase prices organized. The one year I got audited, having detailed records with photos for each animal saved me thousands.

Another cattery owner here! Just wanted to add that how you handle your breeding cats can have big implications for years to come. If you treat them as capital assets and depreciate them, you'll need to report gain/loss when you "retire" them from breeding. I learned this the hard way when I rehomed some of my retired breeders. Had to report the difference between their depreciated value and what I got for them. My accountant said I should have been tracking each cat's "adjusted basis" all along! Also, consider Section 179 expensing for some of your larger equipment purchases (like specialty cages, air purification systems, etc.) instead of depreciating them - might give you a bigger deduction upfront.