1. You operate your farm in a businesslike manner. (As manager, do you have a business plan, have you set goals, do you keep records?)
2. The time and effort you spend on farming indicate that you intend to make a profit. (Do you spend sufficient time and energy on attaining that goal?)
3. You depend on income from farming for livelihood. (Here, full-time farmers have an advantage, but the income issue relates more to the farmer's need for deductions than his or her dependence on farm income. Farmers having off-farm jobs to supplement their income depend on their farm income, too.)
4. Your losses are due to circumstances beyond your control or are normal in the start-up phase of farming.
5. You change your methods of operation. (You could begin to winter calves rather than sell them in the fall or finish cattle to slaughter weights; the income could be delayed several months.)
6. You and your advisers have the knowledge to carry on the farming activity as a successful business. (Attending continuing education classes can offset perceived weaknesses in this area.)
7. You made a profit in similar activities in the past.
8. You made a profit farming in other years and can document how much you made.
9. You can expect to make a future profit from appreciation of the assets used in the farming activity."

Ask your tax advisor. Some may be more willing to stretch the rules, but it's best to play it straight.