[MileHiSS]

Does anyone one claim their chevelle (and costs):yes: :noway: as a hobby expense(To extent of income) as a miscellaneous Itemized deduction on their income tax?

 

[ssal396]

Not me......

 

[66 MYSTERY CHEVELLE]

I know my brother does this for his Bantam Race car.. qrt mile racing a 8 sec car for points, etc.. and does well!

 

[Olle]

Can you claim the expenses if they don't generate any income? Thought it had to be considered as some kind of business to make deductions.

 

[BB_Mike]

Can you claim the expenses if they don't generate any income? Thought it had to be considered as some kind of business to make deductions.

This is true. However, you can have a income generating deduction that just so happens to leave you in the red zone. Like a race car that sucks at winning.

 

[SS_Dave]

Itemized deductions are a totalized figure of ALL your deductables.
You need at a minimum of some value to even make itemizing worth while.
I'm not a tax guy, ( pretty obvious, huh? ), can a tax guy out there say
just how much you would need to "loose" to even be able to file an itemized
return?

 

[BillsCamino]

Yes but after a couple years you better show some kind of profit (at least no losses) or you'll have a good chance of being audited.
A side business is deductable, of course. A hobby is not.

 

[136679ss]

Yes but after a couple years you better show some kind of profit (at least no losses) or you'll have a good chance of being audited.
A side business is deductable, of course. A hobby is not.

Actually Bill, hobby expenses are deductible; but how the tax law is setup it ends up being a wash in most cases.

 

[animal69]

Actually Bill, hobby expenses are deductible; but how the tax law is setup it ends up being a wash in most cases.

They are only deductible up to the amount you make on your hobby. You cannot deduct more than you made. If you don't believe me wait until you are audited! And you will be. DAMHIK:noway:

 

[BowtieSS]

¶ 1778. Hobby (not-for-profit) losses.
For individuals, partnerships, estates, trusts and S corporations, deductions attributable to an activity not engaged in for profit ( ¶ 1777 ) ( Code Sec. 183(a) ; Reg § 1.183-1(a) ) FTC ¶ M-5802 ; USTR ¶ 1834 et seq.; Tax Desk ¶ 422,001 are allowed only as follows:

(1) The full amount of deductions (e.g., state and local property taxes) otherwise allowable for the tax year without regard to whether the activity is engaged in for profit ( Code Sec. 183(b)(1) ; Reg § 1.183-1(b)(1)(i) )—referred to as “Category 1 deductions.”
(2) Amounts allowable as deductions only if the activity were engaged in for profit, but only if the allowance doesn't result in a basis adjustment, and only to the extent the gross income from the activity exceeds the deductions in (1), above ( Code Sec. 183(b)(2) ; Reg § 1.183-1(b)(1)(ii) )—“Category 2 deductions.”
(3) Amounts allowable as deductions only if the activity were engaged in for profit, that if allowed would result in a basis adjustment (e.g., depreciation), but only to the extent the gross income from the activity exceeds deductions allowed or allowable under (1) and (2) ( Code Sec. 183(b)(2) ; Reg § 1.183-1(b)(1)(iii) , Reg § 1.183-1(b)(3) )—“Category 3 deductions.” FTC ¶ M-5804 et seq.; USTR ¶ 1834 ; Tax Desk ¶ 422,001 et seq.
In other words, deductions attributable to the “not for profit” activity are allowed to the extent of income from it, or for the full amount of related deductions allowable regardless of profit-seeking, whichever is larger. FTC ¶ M-5804 ; USTR ¶ 1834 ; Tax Desk ¶ 422,001

However, the deductions allowable under these rules are subject to the 2%-of-AGI floor ( ¶ 3110 ) on miscellaneous itemized deductions. ( Reg § 1.67-1T(a)(1)(iv) ) FTC ¶ A-2710 ; USTR ¶ 674 ; Tax Desk ¶ 422,003

© Copyright 2007 RIA. All rights reserved.

 

[Dean]

What if your thing is hunting, fishing, drinking and chasing women, can you deduct those expences?

PS: the only one of the above I do is hunt (in salvage yards)

 

[Olle]

What if your thing is hunting, fishing, drinking and chasing women, can you deduct those expences?

Only if it exceeds your income.

 

[1966_L78]

What if your thing is hunting, fishing, drinking and chasing women, can you deduct those expences?

But Honey, its a write-off...

 

[BB_Mike]

¶ 1778. Hobby (not-for-profit) losses.
For individuals, partnerships, estates, trusts and S corporations, deductions attributable to an activity not engaged in for profit ( ¶ 1777 ) ( Code Sec. 183(a) ; Reg § 1.183-1(a) ) FTC ¶ M-5802 ; USTR ¶ 1834 et seq.; Tax Desk ¶ 422,001 are allowed only as follows:

(1) The full amount of deductions (e.g., state and local property taxes) otherwise allowable for the tax year without regard to whether the activity is engaged in for profit ( Code Sec. 183(b)(1) ; Reg § 1.183-1(b)(1)(i) )—referred to as “Category 1 deductions.”
(2) Amounts allowable as deductions only if the activity were engaged in for profit, but only if the allowance doesn't result in a basis adjustment, and only to the extent the gross income from the activity exceeds the deductions in (1), above ( Code Sec. 183(b)(2) ; Reg § 1.183-1(b)(1)(ii) )—“Category 2 deductions.”
(3) Amounts allowable as deductions only if the activity were engaged in for profit, that if allowed would result in a basis adjustment (e.g., depreciation), but only to the extent the gross income from the activity exceeds deductions allowed or allowable under (1) and (2) ( Code Sec. 183(b)(2) ; Reg § 1.183-1(b)(1)(iii) , Reg § 1.183-1(b)(3) )—“Category 3 deductions.” FTC ¶ M-5804 et seq.; USTR ¶ 1834 ; Tax Desk ¶ 422,001 et seq.
In other words, deductions attributable to the “not for profit” activity are allowed to the extent of income from it, or for the full amount of related deductions allowable regardless of profit-seeking, whichever is larger. FTC ¶ M-5804 ; USTR ¶ 1834 ; Tax Desk ¶ 422,001

However, the deductions allowable under these rules are subject to the 2%-of-AGI floor ( ¶ 3110 ) on miscellaneous itemized deductions. ( Reg § 1.67-1T(a)(1)(iv) ) FTC ¶ A-2710 ; USTR ¶ 674 ; Tax Desk ¶ 422,003

© Copyright 2007 RIA. All rights reserved.

As a CPA, you should know that a translation is needed.

 

[MileHiSS]

Well, I itemize anyway, and the sheets that I have to fill out for my CPA, ask for those hobby deductions. If we could get these car shows to start paying, then even if we didn't have much income:sad: ...............oh, well, I was just wondering.

I used to expense the Craftsman Pro truck that I sponsored, but it was all done through my business advertising expense. Talk about an expensive hobby!

 

[gigem]

¶ 1778. Hobby (not-for-profit) losses.
For individuals, partnerships, estates, trusts and S corporations, deductions attributable to an activity not engaged in for profit ( ¶ 1777 ) ( Code Sec. 183(a) ; Reg § 1.183-1(a) ) FTC ¶ M-5802 ; USTR ¶ 1834 et seq.; Tax Desk ¶ 422,001 are allowed only as follows:

(1) The full amount of deductions (e.g., state and local property taxes) otherwise allowable for the tax year without regard to whether the activity is engaged in for profit ( Code Sec. 183(b)(1) ; Reg § 1.183-1(b)(1)(i) )—referred to as “Category 1 deductions.”
(2) Amounts allowable as deductions only if the activity were engaged in for profit, but only if the allowance doesn't result in a basis adjustment, and only to the extent the gross income from the activity exceeds the deductions in (1), above ( Code Sec. 183(b)(2) ; Reg § 1.183-1(b)(1)(ii) )—“Category 2 deductions.”
(3) Amounts allowable as deductions only if the activity were engaged in for profit, that if allowed would result in a basis adjustment (e.g., depreciation), but only to the extent the gross income from the activity exceeds deductions allowed or allowable under (1) and (2) ( Code Sec. 183(b)(2) ; Reg § 1.183-1(b)(1)(iii) , Reg § 1.183-1(b)(3) )—“Category 3 deductions.” FTC ¶ M-5804 et seq.; USTR ¶ 1834 ; Tax Desk ¶ 422,001 et seq.
In other words, deductions attributable to the “not for profit” activity are allowed to the extent of income from it, or for the full amount of related deductions allowable regardless of profit-seeking, whichever is larger. FTC ¶ M-5804 ; USTR ¶ 1834 ; Tax Desk ¶ 422,001

However, the deductions allowable under these rules are subject to the 2%-of-AGI floor ( ¶ 3110 ) on miscellaneous itemized deductions. ( Reg § 1.67-1T(a)(1)(iv) ) FTC ¶ A-2710 ; USTR ¶ 674 ; Tax Desk ¶ 422,003

© Copyright 2007 RIA. All rights reserved.

Whenever I have to read this stuff I just want to

 

[GottaCruise]

I think this states that you can deduct the hobby expenses (assuming you are including the hobby income) on your tax form, but no more than the income. If you don't include the income then you can't deduct the expenses. If you had no income, you can't deduct the expense. If you had income, but no expenses, you get taxed. Pretty sweet deal, huh!

 

[Chris R]

What if your thing is hunting, fishing, drinking and chasing women, can you deduct those expences?

Only if it exceeds your income.

So that means you could spend all your loot on guns, strippers, and beer then?

 

[Dave Birdwell]

Yeah, so if I win money in the brackets when I bowl at Reno this year, I get a 1099 form to submit next year. So I keep all of my expenses and show that it cost me more to win money than I won, so it is a wash.
What I don't get, is how the Government can take taxes out of money that is already taxed????

 

[dave_silva]

I write off my racing expenses and cost related to my race car for a given season, but I do get a 1099 from the track from earnings.