Tax Advice for kit hobby?

scheefj at netscape.net scheefj at netscape.net
Sat Oct 20 22:07:30 CDT 2007


I think you just made my point. BIG businesses are not a hobby, they are 
corporations and thus a different animal. It's always the little guy who 
gets screwed.

cisin at xenosoft.com wrote:
> On Wed, 17 Oct 2007 scheefj at netscape.net wrote:
>   
>> Grant,
>> When I was a sole proprietor of a similar business, I was told that the
>> business had to make money at least once in every three years for the
>> losses to be deducible from ordinary income.
>>     
>
> WHO told you that?
> It ain't true, and there have been a few BIG businesses that have had more
> than 2 successive years of losses.
>
> BUT, . . .
> there is the issue of whether the IRS will believe that it is a business,
> not a hobby.  IF you always lose money (less than 1 in 3 profitable, or
> less than 2 out of 5, etc. depending on the agent), then they are MUCH
> more likely to take a look at whether or not they'll believe that it is a
> "real" business.
>
>   




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