Hobbies
If you ever asked whether or not you can take a deduction or loss on a hobby, here are a few questions you should ask...• What manner was the business was carried on?• What expertise do you or your advisors have?• How much time and effort was used to carry on this activity?• What expectation, that assets used in the activity, may appreciate?• What success have you had in carrying on the other similar or dissimilar activities?• What history of income did you derive from your hobby?• What was the amount of occasional profits, if any, did you earn?• What is your financial status?• What elements of personal pleasure or recreation did you derive from the hobby?
In the case of Thomas W. Jackson vs. Commissioner 59 TC 312, the court concluded that the fact that the taxpayer enjoyed sailing [Jackson's hobby] does not change the result since suffering has never been a prerequisite to deductibility.
In the case of Thomas W. Jackson vs. Commissioner 59 TC 312, the court concluded that the fact that the taxpayer enjoyed sailing [Jackson's hobby] does not change the result since suffering has never been a prerequisite to deductibility.
There are other tax-cutting strategies in addition to those mentioned here. If you would like assistance in selecting tax-saving strategies that make the most sense in your situation, contact us today!