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The Manner in Which the Taxpayer Carries on the Activity - Record Keeping

Is the business carried on in a business-like manner? First a separate business checking account should be maintained. This illustrates to the IRS you are serious about having a business. You will need a properly registered business name to obtain a checking account. A registered name also helps with your brand identity including web-page design and it is protected for the long term. Pick a business name that is web ready. Check whether a domain name (or web address) is available. You can do this using the WHOIS database of domain names.  If it is available, be sure to claim it right away. This guide explains how to register a domain name.  Next register your trade name. Registering your business name involves a process known as registering a “Doing Business As (DBA)” name or trade name. Registering your “Doing Business As” name is simply the process of letting your state government know that you are doing business as a name other than your personal name. If you are operating under your own name, then you can skip the process. Learn about the requirements in your state and how to file in this Registering Your Doing Business As Name guide.

Second you must keep good records. Record keeping is one of those items that is a necessity. Records include everything from a receipt for a shovel to a record of income for the business. One should also keep track of horses and their uses. I keep all receipts for any products I purchase for the farm. For example if I go to Theisans and purchase a halter and lead rope and I also purchase dog and cat food I would only record the halter and lead rope expense. The reason for this is 1) Honesty and 2) When I was audited the IRS goes through every receipt to see if the totals match up to the expenses one records for the year. The other day my electric fence unit went out and it was less then 30 days old. I contacted the company and they told me to take it back to the store if I had the receipt. I could not find the receipt but I knew I kept all receipts and it had to be somewhere. Finally I remembered I had purchased a tire that day and a warranty for fixing flat tires but I had to keep the original receipt with it. I looked in my glove compartment and there was the receipt for the electric fencer.

There are many ways to keep records.  You can write them in a ledger or use a computer program. I personally use Quicken for Home and Business to record my purchases. I can use “split” and record a purchase from a receipt that has both business and non-business purchases. QuickBooks is a good program as well as Horsemen’s Income  Record Keeping System. One could also use Excel. I actually transfer my horse business purchases and income to excel at the end of the year to match up receipts and add cash purchases before I meet with my accountant. My late husband did not record his purchases and kept receipts in piles all over the place. I would have to go through each receipt and record the purchase at the end of the year in Excel. I could also match the date, location and mileage using Excel. For example let’s say I had a purchase at Lowe’s for fence posts. I could post next to it 20 miles (10 miles each way). At the end of the year I would add my mileage plus add any other mileage for the business such as attending a show or sale.

Remember The Manner in Which the Taxpayer Carries on the Activity is extremely important if the IRS decides to audit your business.

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The Manner in Which the Taxpayer Carries on the Activity - Business Plans

The IRS will evaluate if you carry out your horse business as businesslike What does this mean? Listed below are questions to ask yourself.

  1. Do you have a business plan?
  2. Do you keep accurate records including records of the time you spend on your horse activity?
  3. Do you market the business?
  4. Are new techniques used in the operation?
  5. Are unprofitable strategies abandoned?

The business plan is essential.  I was audited after the first year of setting up my horse business as a business. The first thing I did was call an accountant that knew something about Student Field Trip to Prairie Meadows Racetrackhorse business’s. In fact the accountant went to the audit with me. I had used a company that set the business up on a Schedule C for small businesses. Setting my business up as a schedule C was one of the problems the accountant stated. The business should of been set up on a schedule F for agriculture. The auditor knew nothing about a horse business. We had to show them the business plan as well as explain the business plan. My late husband was excellent at explaining the business plan.

The business plan is a working tool that provides a road map for an auditor, bank, creditor or others in the horse industry. Business plans should provide a vision and mission statement. The plan should explain the key elements of your business as well as the current status of the business.  Plans should describe your current and future goals. List the management structure of the business including the number of employees. Business plans should define your service or product – what is unique about your business, what differentiates it from others in the market, and why will people use your service or product. The plan should define your market – who do you sell your service/products to and how big is your market. In the audit my husband actually discussed the reining and cutting industry so that the auditor became familiar with the horse industry. Plans should list who your competition is and why a customer will choose your business. Business plans should include a marketing plan that describes what outlets you plan to use as well as what it will cost. Financial data is very important. What are your financial projections for the next year, three years, and five years. What do you need to accomplish your projections – money, time, personnel and equipment? A business plan should include income and expense projections, cash flow projections and provide a balance sheet. Last of all the plan should be regularly updated in case you need to change directions in your business.

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Master Equine Manager - Knowledge for All Horse Owners

MEM Logo The Master Equine Manager program originally started as a county activity but as the internet developed it was redesigned to accommodate people’s busy schedule's. You can sign up anytime as well as take the lessons anytime. The goal is to provide horse owners and enthusiasts with a comprehensive education program that teaches the science of horse management. The course consists of four modules with 2 or 3 lessons within each module. They are listed below along with registration fees. For each lesson there are videos, articles, discussion of the topic, links to related videos and/or articles and activities. Examples of activities include drag and drop, crossword puzzle, matching topic to questions and many more. I also included what is covered within the lessons and the objectives for each lesson.

Each lesson has a quiz associated with the subject. The quiz is multiple choice or true/false. You are required to pass the quiz with an 80% or better. You have multiple opportunities to pass the quiz. Once you have completed all of the lessons you will receive a certificate, name badge, opportunity to purchase clothes with the logo on the clothing, added to a network of others who have completed the program, thorough access to a vast source of resources within the lessons. Business owners can use the certificate to help promote their program. This summer the next program Master Equine Professional will be released. Individuals will need to have completed the MEM program to participate in the 2nd program.

Depending on your location, an optional Master Equine Manager hands-on supplemental course is offered at select locations including Iowa State University, Ames, IA; Waterloo, IA, the University of Connecticut, Storrs, CT and the University of Nebraska, Lincoln, NE. One goal of ours is to develop the opportunity for business owners or schools to hold an optional program.

More information is available on the Master Equine Manager website, www.extension.iastate.edu/equine. To purchase the online learning modules, click here!

Master Equine Manager e-Modules and Registration Fee

Welfare of Horses

 

Adult (19 & Over)

High School Students
  • Understanding Horse Behavior
  • Equine Quality Assurance

$90

$50
  • Facilities and Equipment

 

 

 

Horse Nutrition

 

$90 $50
  • Forages for Horses
  • Feeds and Feeding

 

 

Horse Health

 

$90 $50
  • Equine Emergency Treatment

 

 
  • Diseases and Parasites

 

 

 

Selection of Horses

 

$90 $50
  • Conformation and Evaluation
  • Unsoundness’s & Blemishes

 

 

Purchase All Four

 

$310 $150

Optional Workshop

 

 

 
  • New Master Equine Manager’s - Included after completion of 2 modules
   
  • Former Master Equine Manager’s
$40 $40
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Carley - Sao Paulo Day 2

Today was our first full day in Sao Paulo. After getting a great night's sleep, we started off with a fantastic breakfast that consisted with an assortment of fruit, eggs, bacon, waffles, and juices. The yogurt was in a liquid form that you drink which was weird but it was still very good. 

We began with an hour drive of the city on the way to the zoo. We drove through some areas with shops and lots of people (everything was closed because it was Sunday and everyone closes up shop on Sunday) but we had seen some of the shops on the walk yesterday so we knew what they looked like. A lot of the houses that we drove by were gated and very close together. Most of them had little shops with garage doors on their properties which was very different from anything I've seen before. One of the things that stuck me was the streets and how confusing they were. The streets are so crazy steep and drivers were very erratic but we got there in one piece! The Zoologico de Sao Paulo was one of the coolest places that I've ever been in my life. The place was so lush and green and had a huge lake with little islands and monkeys on them! Adrian and Patty took us around the zoo and showed us the highlights of Brazil's animals. They included various types of alligators, macaws, wild cats, as well as many others. My favorite was seeing an ocelot that reminded me of the tv show Archer. The other thing that struck me as odd was how there were domestic cats walking around the exhibits (one of which was in the seal pen) but we found out that they were feral cats that lived there to take care of pests. 

We then went to the China Town area and that was nuts! There were so many people and there was something interesting to look at in every direction. The market was full of people getting lunch and shopping around the various tents. For lunch most of us got meat sticks (strip steak) called pichana while a few others tried some of the . Ordering was slightly overwhelming but once we got rescued by Patty we got our food quickly. The language barrier is extremely difficult but we try to work around it using simple phrases that we do know and a lot of pointing at stuff that we want. Amanda and I broke off and looked at some of the tents that were there. Venders had everything imaginable: jewelry, leather goods, clothing, and home decor. One of the things that I bought was a necklace that Patty showed us. It was my name written on a single grain of rice and set in a tiny vial filled with water. It was so cute! I'm hoping that I see some more leather goods later in the trip to see if I can find a pair of boots. The shopping continued on Avenue Paulista where there were more venders and antique sellers. There was music and the boys were dancing the zumba! Once it started to rain we got back on the bus and headed back to the hotel. Dr. Skaar took a few of us to the super market so we could get snacks and a few bottles of water. I got a lemon lime tart that tasted really good. Once back to the hotel again a few of us that decided that night life wasn't for us decided to go swimming and chatted around in the lounge.

And that was the day! I really look forward to tomorrow!  

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May 22: Zoo and the streets of Sao Paulo

Today we went to the zoo and walked around what they call China Town and what would be similar to our Wall Street. 

At the zoo they had your typical animals for any zoo that would be from other countries, but what I found weird was that many of them were those who were indigenous to Brazil. The zoo was very large, though we did not get to see everything in the few hours that we were there, it amazed me that there was no aquatic animals besides seals and some reptiles that lived on both land and in water. They had a lot of turtles, some even the same species in multiple habitats. They also had like steps/bleacher things that you could stand on for certain animals that would be more popular so that you could see the certain parts of the habitat better. 

From there we went to what was called China Town were there was many food venders and just about any type of vender that you could think of. Some girls got their names on rice, some got names written in wire. The food vendors had many varieties and a wide range of options for backgrounds of the foods. What I didn't realize until we were walking down them that the steps to the subway was like in the middle of China town. The subway was like any subway but we had to buy the ticket and you could go one way for a really cheap price. When we came out of the subway there was a street band singing in English. This street was their business/political street that was usually really busy with traffic was actually shut down and people were walking all around on the street with no cars. They do this every Sunday and have like a market on one side and a antique flea market type thing on the other. Though I describe it as that, these venders I felt like were a lot fancier than the other venders that we saw. 

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Day 5: Off to the races!, Barrel races that is.

We are currently in the town of Itu, Brazil experiencing the wonderful things that they have been doing with different horse breeds, one of them being the quarter horse. To get this experience we went and stopped at the Haras Raphaela ranch to talk to them about the things that work for them regarding the care and breeding of these horses as well as the barrel racing aspect in which their horses compete in. The ranch is about 160 acres and only about 100 of that is used for horse needs. The manager of the barn informed us that they use a large quantity of mares in the embryo transfer side of things, because by using another horse to raise the young it leaves the top level competitors for barrel racing to continue doing just that. He went on to speak to us about the different things they do for the horses like having an acupuncturist to come around once a month to see if any of the horses need it, as well as at least 3 vets coming and going constantly, with even an agronomist coming once a month to ensure that the quality of pasture stays at its peak condition.  After having toured the grounds and seeing the spectacular facilities we even got the opportunity to watch trainers from different areas around Brazil work horses on barrels and see the technique and thought they put into their training. Overall we had the time of our lives and can't wait to see what is next in store!

 

 

 

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Day 5: Quarter Horses and Creole breeds

Today, as we explored the great country-side of Itu, we got the chance to learn about two different horse breeds the help to make up the horse industry here in Brazil. Our first stop of the day was at a Quarter horse farm called Haras Raphaela. This farm was spread out over 100 acres and houses anywhere from 200 to 250 horses at one time. Not only do they breed on this farm, but they also train professional barrel racers and hold many different barrel racing competitions within their facilities. While taking a tour around the stables, I noticed that there was a lot of similarities to how we house and care of horses in the United States. The barns as well as the views were breath-taking! After the tour, we got the chance to hang out in the competition arena where tons of barrel racers were practicing to get ready for a competition later in the evening. It was a lot of fun to be able to watch the racing and hang out with everyone. 

Our second stop of the day was at a really nice hotel by the name of  Fazenda Capoava. The owner of the hotel also owns a herd of Creole horses, which is a breed from Portugal. This horse breed is pretty small compared to the other breeds and are used in a lot of high endurance competitions. At this farm, they trained these horses for high-class competitions. It was really cool to see the cutral aspects of the breed that they still use in showing today, such as the old Brazilian saddle, older-styled bridles, and knotting the tail before competing. After touring the farm, we sat by a large fire in the hotel and just hang out for a while until dinner. For dinner, we got the opportunity to try several different types of Brazilian food. Once dinner was done, we got back on the bus and came back to the hotel. I have to say that it was one of my favorite days thus far!  

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May 27/28 - Arrival at the Resort

Dr. Gobaso showed us the school yard and teaching facilities after our morning breakfast. When comparing the buildings to our own, there are several pros and cons to each to take into account. What I believe to be essentially important to their school system is the rustic architectural structure of the buildings, and the food at their cafetaria that is grown right there on the farms. What I like about our classes over theirs is how clean and organized our buildings are because it appears that our educational system is more structured, even with its flaws. On a side note, we all had a great laugh feeding the carp in the pond in front of the school. Afterwards, we took a bus ride to the research barns where we had the privilege of witnessing banana fields, nelore cross cattle, etc. It was great to see that many Brazilian farmers also favor using Alis and Massey tractors to my ammusement. The Brazilian students gave us a quick guided tour of the facilities after we got off the bus, and presented their research findings. It was quite difficult trying to get over the language barrier when asking them questions over their findings, but the overall experience proved to be beneficial in learning their interests. We than rode the bus to a river full of restaurants where we had a fish buffet. The scenery was something I could get use to as the shops and riverbed looked like a scene from the movies. The food was very much like an American buffet, in the sense that there was a couple great dishes with the rest being filler or questionable at best. Following the buffet we said our good byes and took an airplane ride to Gioania. The bus ride to the resort from the airport was long with one sketchy stop along the way, but it was well worth the wait. The resort had many amenities such as two meals a day, swim up bars, and zip lining. Pictures and words alone are not enough to describe the enormity and excitement of this place. The resort was in a gated community of sorts and gave a sense of safety, until you walked in town a couple blocks. Personally, I liked this about the resort because you could escape during the night life to witness tents of the food vendors. Lastly, the waterpark that was included was overall impressive, but it was not as good as the Wisconsin Dells. The water park here had several slides, but it felt like it was going for more of a relax on the beach feel. What shined the most was the hot springs at night with rocks beneth our feet. We all spent most of the night here, and will likely do so tomorrow. 

Jared G.

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May 28 - First Day at the Resort

Today was a day full of fun. We weren't bright eyed and bushy tailed until about 9:30 for breakfast. We truly woke up in a different world. Last night when we came we couldn't see anything in the dark. Just knew that we were somewhere with warm water and swim up bars. Turns out this resort is tucked away in the middle of nowhere and surrounded by mountains. After breakfast we went to explore the resort and hot park. There were countless things to do including hiking, fishing, kayaking, zip-lining, swimming, floating on a lazy river, slides, a thrill of a ride called the half-pipe, paint balling, mini golf, zumba swim class (we thought it was a dance party), and many others that we probably didn't know about because we can only translate so many things from portuguese. We met a 20 year old student of Faculdade de Agronomia Eliseu Maciel last night by the name of Ítalo Machado Cunha. He is from Dom Pedrito which is in the state of Rio Grande Do Sul, the most southern state in Brazil. He helped us out in ordering food and drinks and trying to tell us the prices of different activities. Communication was slow and our English is much worse since we've had to speak in very slow English with a mixture of some spanish words. Some Brazilians know a little bit of Spanish so that's helpful. Being an agronomy student he wants to work with his dad who sells seeds to Dow Agrosciences, Bayer, Monsanto, and others. We tried to do all the activities at the resort but there just isn't enough time in the day. At about 7 pm we went back to the hotel to meet our cattle host, Pedro, and his family. Dr. Skaar's birthday is Sunday the 29th so we got him a cake and had a little celebration. We then went down to the little town where there were a few shops with various foods and then after that we went back up to the hot springs to hang out (they're open 23 hours of the day). That is about all for today. It was good to have a day off to relax and do some fun activities in the resort. The picture below doesn't do this place justice.

 

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Resort Day # 2

Yesterday we had another relaxing day at Rio Quente resorts. There were slides we could go on and very relaxing hot springs that we could go swim in. We were able to meet Pedro and his family at the resort, Pedro works as a consultant for Cargill. Pedro is going to be our tour guide as we go to Goies and visit some of the cattle stops. Today we visited one of the largest cattle feedlots in Brazil. They usually raise around 35,000 bulls a year that they take to harvest. Brazil's cattle industry is very different from ours and they usually do not casterate their males because they can not put implants in their beef cattle. So the cattle producers like the males to have higher levels of testosterone so they gain faster. It typically takes a market animal around 2 1/2  -  3 years to get to market weight. 

 

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