TOPIC: Growing wild simulated ginseng as a business - tax questions

Hi!

First post here. I own a wood lot in a historic ginseng region that I believe is worth trying wild simulated ginseng. I read the Persons/Davis book and the lot meets the requirements as optimum (5100 lbs calcium/acre!, north facing slope, companion plants, shade levels, etc., etc.) for growing conditions. I'm going to try test plots and expand from there if things are positive. No high hopes for anything...just an interesting project idea at this point.

My question centers on the business aspects of this experiment. I look at purchasing seed, gas spent driving to and from my property etc, as possible business expenses for a farming production per the IRS guidance publication 225. I want to take advantage of all government resources available even for the experimental steps of wild simulated farming. Does anyone any guidance/advice on how to proceed with wild simulated \"farming\" as a business?

Thanks!

fishman78,
I do not know how to answer those questions. However, I have planted over 350,000 seeds and the deer have eaten almost all of it over the last 5 years. Really does not matter how much you try to do if you cannot control the deer.
I am not discouraging anyone from attempting to plant ginseng seed. I just want to help you in what to expect if you do not control the deer.
Welcome to the forum.
Latt

Thats $7500 worth of seeds! Aren't you interested in the tax implications for that sort of investment in your potential business?

Absolutely and I hope someone responds to your email. My point is no matter what is done, if you do not control the deer nothing else matters when growing ginseng in any planting method or size of planting. I am going to look into what you are talking about though as I intend on planting a boatload of ginseng seed in the near future in an area I can control the deer population.
Thanks,
Latt

Well, to answer the question \"Does anyone any guidance/advice on how to proceed with wild simulated \"farming\" as a business?\" .

I would simply say document EVERYthing. Until you start selling things and showing that this is not just a hobby, you really need to be able to prove it is what it is...an investment in a farming operation. Keep receipts, ledgers, spreadsheets or whatever it takes for you to be able to document your activities and how they are related to the farming operation.

Good luck!

fishman78,
Thanks again for posting this. It really got me thinking more about possible benefits of getting knowledgeable about this since I plan on starting a ginseng farm someday soon.

BCastle, go Buckeyes!! lol

Latt

Yes, everything is a write off. EVERYTHING associated with your adventure. You'll have to go online to your state division of corporations and file a name. Whatever name you decide. In FL it's $150 bucks a year for renewal. I don't know about your state. You'll keep track of your mileage on your vehicle(mileage is more of a write off). Seeds, rakes, shoes, gloves etc... The only way to write everything off is to file a name and then get a tax id number. You'll take that number to the bank to set up an account. File your taxes with that buisness every year, even if your showing a loss.

I think an issue you might run into is that for the tax collectors to consider it a \"business\", you might have to show a profit or sales, or some other type of \"business\" like activity. I know some folks who looked into crop insurance for ginseng, and they would not insure the \"crop\" until they could show sales. I don't think that the average small wild simulated grower is going to be able to meet the standards required by the tax code for write off's. If it was that simple everyone would do it. When you try and work the tax angle they are not going to want to hear that it will be 10 or more years before you even make a sale of wild simulated root, and there is a high probability of failure!

Another option would be to enroll in some kind of specialty crops assistance programs, or get grants for specialty crop business development. That would help put you on the track to being able to verify a \"business venture\" Granted I'm not an accountant, but that seems like the most common sense reality of the situation. You should document everything though because if you do get to a more established business situation, then all of that will be valuable information to have. Just my thoughts.

Interesting perspective Rural Action. I would think if you pulled an LLC or such, you could deduct business expenses such as buying seed, tillers, etc. I currently work for an R&D company...we go 10 years in product development without sales, yet can still deduct a whole range of business expenses.