Discussion:Hobby vs Business
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| Revision as of 03:03, 15 October 2009 Solomon (Talk | contribs) ("''...he is conv) ← Previous diff |
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| {{ForumReplyPost|UserID=Solomon|Date=15 October 2009|Text="''...he is convinced that his activity would qualify as a business if he were audited. However, he doesn't want to be audited by the IRS since he would have to pay me to represent him.''" | {{ForumReplyPost|UserID=Solomon|Date=15 October 2009|Text="''...he is convinced that his activity would qualify as a business if he were audited. However, he doesn't want to be audited by the IRS since he would have to pay me to represent him.''" | ||
| - | If he is familiar with the nine criteria and has that high of degree of certainty, it his call. Form 5213 might come into the picture if in fact he does hear from them - think 60 days to file after notified.}} | + | If he is familiar with the nine criteria and has that high of degree of certainty, it is his call. Form 5213 might come into the picture if in fact he does hear from them - think 60 days to file after notified.}} |
Revision as of 03:07, 15 October 2009
Discussion Forum Index --> Basic Tax Questions --> Hobby vs Business
Discussion Forum Index --> Tax Questions --> Hobby vs Business
| 15 October 2009 | |
| My client hasn't made a profit on his business for the last four years. He has a "home office operating loss carry forward" from 2007 which will guarantee that he won't show a profit for years to come, assuming that his income & expenses remain about the same. Without using that carry forward, he will show a profit on the 2008 tax return. Is it likely that the IRS would see that the business would be profitable if it weren't for the carry forward? Or is it more likely that the IRS would simply look at the fact that the client continues to show no profit and he would eventually be targeted for an audit? I have provided the client the IRS publication differentiating hobby vs. business and he is convinced that his activity would qualify as a business if he were audited. However, he doesn't want to be audited by the IRS since he would have to pay me to represent him. Any thoughts on this issue? | |
| 15 October 2009 | |
| "...he is convinced that his activity would qualify as a business if he were audited. However, he doesn't want to be audited by the IRS since he would have to pay me to represent him."
If he is familiar with the nine criteria and has that high of degree of certainty, it is his call. Form 5213 might come into the picture if in fact he does hear from them - think 60 days to file after notified. | |
