What qualifies have to be met to call your property a farm. Does size matter.?

I own a few acres and was wandering what is the best way to make use of the space. Coworkers allways say just start a small farm on your land and you will pay less in taxes, and you will have a lot of write offs. Is there a certain amount of land you have to have before it qualifyies as a farm. Or could you have say 4 acres filled with good harwood trees and call it a tree farm and write off exspenses for equipment to maintain the farm and fencing material to protect it and seeds and stuff. Also is there extra incentives for having a farm that a lot of people are unaware of. Any information is appreciated.

I wouldn't mess with this - ask an accountant for specifications. It's more than just saying, "I have X acres and grow Y." There's much more to it.

I would HIGHLY suggest talking to an accountant though.

You would have to check with your state for requirements for any property tax breaks. For example in WI to get zoned agriculteral (where assessment is based on crop value, instead of value of land and improvements) you have to derive a significant part of your income from farming. If you get a tax break for a tree farm, you have to allow others to hunt it. BTW you forgot the "d" in hardwood.

Of course if you operate a hobby farm, you can deduct your expenses from your sales. I don't know if anyone could offer specific incentives without knowing where the property is located.

You are required to have a minimum number of acres (much more than 4 acres) according to the IRS Rule. You have to show proof that you are OPERATING a legitimate farm.........trees don't eat grass, produce milk, lay eggs, etc. Neither do they grow hay, corn, beans, tomatoes, etc.

Your question should have been, "How many years do I spend in prison for defrauding the Internal Revenue Service?"

You are wandering! Two acres does not make a real farm. It makes a hobby farm. You can sell your produce and write off expenses, but can't show a loss.

Four acres of trees will not make a tree farm--and there is no such thing as harwood--except for maybe a Christmas Tree farm close to where customers can come and cut their own.