NEW YORK (MainStreet) — When Dee Dee Murray, a Seattle artist, taught her dog to paint, she never dreamed putting a paintbrush in the Dachshund's mouth would also help her own business.
"When I would paint, she would always come up and lie beside me, and I just wondered if she wanted to paint," Murray says. "She wasn't one who I could just put a brush in her mouth — it took about two months — but once she learned, there was no stopping her."
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The then 10-year-old Hallie was already working up doggy masterpieces when she suddenly developed an eye condition that caused her to go blind. Hallie eventually returned to the canvas, though, and Murray, selling the works for $100 each, has raised more than $13,000 for a local animal rescue. The dog enjoys painting so much that Murray has to limit her time with the brush so she doesn't get burned out.
What's even more surprising to Murray, though, is how Hallie's career has helped her own. I have ridden a bit on Hallie's coattails through this," Murray says. "Last year I would say she increased my dog portrait commissions by about 30%."
About 50% of Murray's income is made through paintings of wildlife and commissioned pet portraits. She also owns a business with her brother doing Web design and selling pinewood derby cars.
Jeanette Dugas, a CPA with Dugas & Dugas CPA in Winter Haven, Fla., says that if you're going to go into business with your pet, you need to make sure everything is completely documented. "The IRS looks at pets as a personal expense and generally doesn't like to see them deducted," Dugas says.
There are exceptions to every rule and service dogs are one big exception. The rules for service dogs are generally very liberal, allowing almost all of the expenses associated with the dog to be deducted.
In a case such as Murray's, Dugas says if you have a pet that has suddenly found a talent, the first thing the IRS will look at is if you're producing income from the pet.
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"You have to report income properly, and if you're reporting income, then they aren't going to have so much of an issue of deducting maintenance, such as health and well-being, food, paint, canvases for the dog and other related expenses," Dugas says.
Another dog that has made headlines this year for his sudden fame is Otis, a photobombing dog in Chicago, Who at first accidentally appeared in a couple of photos his owner was taking of the apartment he was putting up for rent.
"I showed the pictures to my wife, and we thought it would be funny to put him in all of the pictures," John Kanive says.
Kanive says Otis, a Shepherd/Great Dane mix rescue dog, will do anything for cheese, so he bribed him to sit in certain spots throughout the apartment in exchange for Kraft singles.
When the photos of the apartment were put up on Craigslist, Kanive says he got tons of responses, most of them starting out, "I love your dog. By the way, is the apartment still for rent?"
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Kanive and his wife, Sarah, rented their apartment in under 24 hours and also snagged a contract with realtor.com for its member Realtors to use Otis' image to create their own photobombs to advertise pet-friendly listings around the country.
"He's always been a model, he's a good looking dog," Kanive says. "I'm hoping maybe he will climb the corporate ladder."
Kanive isn't seeking any other work for Otis, and he and his wife aren't quitting their day jobs.
Cats, too, can become Internet sensations, as Grumpy Cat has. The cat's owners have turned the pouty feline into a protected image and brand by filing for copyright protections on her image and trademark protection on associated merchandise.
Other animals that can be deducted, Dugas says, are service animals, as explained above. But they have to be taken under medical deduction for guide dogs and service dogs.
As service animals are being constantly redefined, Dugas says she knows of at least one cat that has received a private letter ruling from the IRS. The cat was trained to alert its deaf owner to door knocking and other sounds the owner needed to respond to, and the owner sought a private letter ruling from the IRS before taking the deduction. "That doesn't mean everyone can do it," Dugas says. "But there is that precedent now."
Another deduction people often try to seek is for a guard dog, Dugas says, but be warned that the IRS will look at the breed, the training the dog got and whether that dog is protecting the property all of the time or maybe comes home with the owner. "Most dogs don't meet that threshold," Dugas says.
As with any type of business, if you're going to go into business with your animal, you will eventually have to show an income and prove that your animal isn't merely a pet. That means eventually not showing a loss. Most people would agree that going into business with a pet that shows unconditional love, though, is most likely the only business you will ever go into where there is never a loss — at least not in the heart.
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