Term
| What is material participation? ( What is it and hours needed) |
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Definition
| Continuous participation in a business or trade for more than 500 hours. |
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Term
| 7 test of material participation? |
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Definition
1. 500 hours or more participation in operations.
2. Owner does more work than any other worker.
3. Owner participates in 100 hours more than any other worker.
4. Any activity involving trade or business more than 100 hours and does not fall under any other test.
5. You participated in 5 to 10 prior tax years.
6. The activity is a personal service that you did for 3 years.
7. You participated continuously for the whole tax year. No other person was paid for management or managed more than you. |
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Term
| Why are LLC's preferable more than any other forms? |
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Definition
| An LLC provides members protection from liability and debt. If you are sued your personal assets can't be gone after only business assets. |
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Term
| What are some personal and social considerations of doing business? |
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Definition
Hours working?
Communication with clients?
Supervising others?
Paying hired help?
Right location for business?
Legal issues? |
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Term
| Name some issues to be familiar with in the "cost of doing business"? |
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Definition
Hired help- cost, good help, liability
Legal issues- falls, kicks, boarding, training,etc.
Location of business- right for you?
permits, licenses, and insurance- against liabilities. |
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Term
| Hobby vs. Business the IRS is looking for what? |
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Definition
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Term
| What may be deducted if a business? or a hobby? |
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Definition
| A business can deduct more than their income. A hobby can only deduct up to their income. |
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Term
| 9 factors the IRS looks for profit motive? |
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Definition
1. Expertise.
2. How business is run.
3. Time and effort.
4.Asset appreciation.
5. Track record for success.
6. History of income/loss.
7. Occasional profits.
8. Owner's financial status.
9. Personal pleasure/recreation. |
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Term
| What is the 2 out of 7 rule? |
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Definition
| 2 years of profits in 7 years of business. Starts when you make a profit. |
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Term
| What are main factors in considering which business structure you will use? |
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Definition
Number of owners/investors.
How business will be run.
Legal protection.
Taxes. |
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Term
| Types of business structures: |
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Definition
Sole proprietership
LLC
Partnership
Corporation
Syndicate |
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Term
| What is a sole proprietorship? |
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Definition
| You run the business yourself and are held liable but get all the profits. |
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Term
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Definition
| 2 or more people run a business and are held responsible for each other. |
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Term
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Definition
| A large business where the shareholders are not liable and the business has responsibility over debt and liabilities. |
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Term
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Definition
| Group ownership usually in racing stock. They own shares in the horse. |
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Term
| What do you need in an attorney and what should you look for? |
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Definition
Partnerships/LLC/Corporation/Syndicates.
Contracts.
Lawsuits.
Disputes.
Injures to others.
You want to look for a attorney that is confident in equine law, member of the bar association, has litigation expertise, and the cost of services. |
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Term
| What do you need in an accountant and what should you look for? |
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Definition
Books.
Taxes.
Paying hired help.
You want someone who is honest, easy to work with, will go with you when audited, and keeps good records. |
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Term
| Careers in the horse industry that are not boarding, training, teaching. |
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Definition
| Veterinarian Equine dentist Tack shop owner Groom Farrier Feed store owner Pedigree analyst Stallion manager Photographer Equine transporter Mounted police officer |
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