What, if anything, is wrong with this sentence?

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Subject Author Date What, if anything, is wrong with this sentence? Bill Brown 07-17-2009  Re: What, if anything, is wrong with this sentence... Stuart A. Bronstein 07-17-2009  Re: What, if anything, is wrong with this sentence... paultry 07-17-2009  Re: What, if anything, is wrong with this sentence... Mark Bole 07-17-2009  Re: What, if anything, is wrong with this sentence... Alan 07-17-2009  Re: What, if anything, is wrong with this sentence... Bill Brown 07-17-2009  Re: What, if anything, is wrong with this sentence... Alan 07-17-2009  Re: What, if anything, is wrong with this sentence... DF2 07-18-2009  Re: What, if anything, is wrong with this sentence... Diogenes 07-18-2009  Re: What, if anything, is wrong with this sentence... Bill Brown 07-18-2009  Re: What, if anything, is wrong with this sentence... Mark Bole 07-18-2009  Re: What, if anything, is wrong with this sentence... Bill Brown 07-18-2009  Re: What, if anything, is wrong with this sentence... Bill Brown 07-18-2009  Re: What, if anything, is wrong with this sentence... Mark Bole 07-18-2009  Re: What, if anything, is wrong with this sentence... Kurt Ullman 07-18-2009   Re: What, if anything, is wrong with this sentenc... Steve Pope 07-18-2009  Re: What, if anything, is wrong with this sentence... Mark Bole 07-18-2009  Re: What, if anything, is wrong with this sentence... D. Stussy 07-18-2009  Re: What, if anything, is wrong with this sentence... Bill Brown 07-18-2009  Re: What, if anything, is wrong with this sentence... Alan 07-22-2009  Re: What, if anything, is wrong with this sentence... Bill Brown 07-22-2009  Re: What, if anything, is wrong with this sentence... Wallace 07-18-2009  Re: What, if anything, is wrong with this sentence... Dick Adams 07-23-2009  Re: What, if anything, is wrong with this sentence... Seth 07-23-2009  Re: What, if anything, is wrong with this sentence... Alan 07-23-2009  Re: What, if anything, is wrong with this sentence... Dick Adams 08-05-2009  Re: What, if anything, is wrong with this sentence... Bill Brown 08-05-2009  Re: What, if anything, is wrong with this sentence... Mark Bole 08-06-2009
Posted by Bill Brown on July 17, 2009, 12:25 pm Please log in for more thread options "The surest way to reduce your taxes is to convert personal expenditures into allowable deductions. Turn even a hobby into a business and you'll cut your tax bill." Are any shortcomings in the above mitigated by this sentence? "All you have to do is establish a 'profit motive.'" Thanks for any comments. Regards, Bill -- << ------------------------------------------------------- >> << The foregoing was not intended or written to be used, >> << nor can it used, for the purpose of avoiding penalties >> << that may be imposed upon the taxpayer. >> << >> << The Charter and the Guidelines for submitting posts >> << to this newsgroup as well as our anti-spamming policy >> << are at www.asktax.org. >> << Copyright (2007) - All rights reserved. >> << ------------------------------------------------------- >> Posted by Stuart A. Bronstein on July 17, 2009, 12:38 pm Please log in for more thread options > "The surest way to reduce your taxes is to convert personal > expenditures into allowable deductions. Turn even a hobby into a > business and you'll cut your tax bill." > > Are any shortcomings in the above mitigated by this sentence? > > "All you have to do is establish a 'profit motive.'" You have to show more than merely a profit motive. You have to show that you are realistically taking efforts to make a profit. I can play race cars with the "motive" of making money by making quick deliveries for people. But if I don't have the proper business infrastructure, if I don't take reasonable steps to market my service in a way that would generate net income, it's still a hobby. Stu -- << ------------------------------------------------------- >> << The foregoing was not intended or written to be used, >> << nor can it used, for the purpose of avoiding penalties >> << that may be imposed upon the taxpayer. >> << >> << The Charter and the Guidelines for submitting posts >> << to this newsgroup as well as our anti-spamming policy >> << are at www.asktax.org. >> << Copyright (2007) - All rights reserved. >> << ------------------------------------------------------- >> Posted by paultry on July 17, 2009, 12:46 pm Please log in for more thread options Bill Brown wrote: > "The surest way to reduce your taxes is to convert personal > expenditures into allowable deductions. Turn even a hobby into a > business and you'll cut your tax bill." > > Are any shortcomings in the above mitigated by this sentence? > > "All you have to do is establish a 'profit motive.'" > > Thanks for any comments. > > Regards, > Bill > If the hobby was turned into a business with a profit motive, the expenditures would no longer be personal. The concept that "personal expenditures" can be legitimately converted into allowable deductions is deceptive. -- << ------------------------------------------------------- >> << The foregoing was not intended or written to be used, >> << nor can it used, for the purpose of avoiding penalties >> << that may be imposed upon the taxpayer. >> << >> << The Charter and the Guidelines for submitting posts >> << to this newsgroup as well as our anti-spamming policy >> << are at www.asktax.org. >> << Copyright (2007) - All rights reserved. >> << ------------------------------------------------------- >> Posted by Mark Bole on July 17, 2009, 1:37 pm Please log in for more thread options paultry wrote: > Bill Brown wrote: >> "The surest way to reduce your taxes is to convert personal >> expenditures into allowable deductions. Turn even a hobby into a >> business and you'll cut your tax bill." >> >> Are any shortcomings in the above mitigated by this sentence? >> >> "All you have to do is establish a 'profit motive.'" > If the hobby was turned into a business with a profit motive, the > expenditures would no longer be personal. The concept that "personal > expenditures" can be legitimately converted into allowable deductions is > deceptive. For one thing, even with a business the expenditures still have to be "ordinary and necessary" in order to be deductible. -Mark Bole -- << ------------------------------------------------------- >> << The foregoing was not intended or written to be used, >> << nor can it used, for the purpose of avoiding penalties >> << that may be imposed upon the taxpayer. >> << >> << The Charter and the Guidelines for submitting posts >> << to this newsgroup as well as our anti-spamming policy >> << are at www.asktax.org. >> << Copyright (2007) - All rights reserved. >> << ------------------------------------------------------- >> Posted by Alan on July 17, 2009, 4:09 pm Please log in for more thread options Bill Brown wrote: > "The surest way to reduce your taxes is to convert personal > expenditures into allowable deductions. Turn even a hobby into a > business and you'll cut your tax bill." > > Are any shortcomings in the above mitigated by this sentence? > > "All you have to do is establish a 'profit motive.'" > > Thanks for any comments. > > Regards, > Bill > Taxpayers and the IRS both wield a two-edged sword on this issue. There are times when the taxpayer wants a hobby (an activity not engaged in for profit) to be treated as a business in order to increase deductions and there are times when a taxpayer wants a business to be treated as a hobby to avoid paying self-employment taxes. The IRS has the same desires. I.e., they either want your profit activity treated as a business (Off Line 21 and onto a Schedule C/C-EZ) to increase taxes or they want your activity treated as a hobby to eliminate your Schedule C/C-EZ deductions. IRC Section 183 and its regulations contain the rules for determining when one has a business or a not for profit activity. Reg. 1.183-2 contains the facts and circumstances tests that are used by the IRS. You can read the Reg. at: http://www.taxalmanac.org/index.php/Treasury_Regulations%2C_Subchapter_A%2C_Sec._1.183-2 Section 183(d) of the IRC has the IRS presumption test. http://www.taxalmanac.org/index.php/Internal_Revenue_Code:Sec._183._Activities_not_engaged_in_for_profit -- << ------------------------------------------------------- >> << The foregoing was not intended or written to be used, >> << nor can it used, for the purpose of avoiding penalties >> << that may be imposed upon the taxpayer. >> << >> << The Charter and the Guidelines for submitting posts >> << to this newsgroup as well as our anti-spamming policy >> << are at www.asktax.org. >> << Copyright (2007) - All rights reserved. >> << ------------------------------------------------------- >> Similar Threads Posted I am confused by a sentence on the IRS website January 24, 2009, 6:16 pm Is my W2 box 2 info wrong? 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