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 | | From:  cherylf929 (Original Message) | Sent: 4/7/2007 2:16 PM |
How many years can you run a loss before the IRS considers it a hobby and not a business?
Here's what I had... 2003 ($224 loss) 2004 $804 profit 2005 ($585 loss) 2006 most likely a larger loss. HELP!!! |
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When I was at H&R Block getting my taxes done, they said it was three years. Trish |
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Here is a link I found online when researching this same topic. Hopefully it will help! Julie |
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 | | From:  Bev1781 | Sent: 4/7/2007 7:25 PM |
What I did with my other business when I was in the sam situation was to remove some of the expenses & not claim them. I figured it was better than risking an audit with another loss. I just removed expenses until the income was higher than the expenses. It doesn't have to be a big profit...just so its a profit!! Bev |
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My accountant said to me this year (2nd year with PC). Next year you'll be showing a profit -- RIGHT? I said yep, absolutely. track all your expenses as you normally would, but then take some off like Bev said so you aren't actually showing a loss. I don't want to take the risk of being audited -- my life is crazy enough as it is! |
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I do the same thing as some of the other gals...I don't claim all of my expenses if it looks like I will not be making a profit. Been selling for about 5 years and my accountant told me that if you show a loss for about 5 years it might red flag you with the IRS. Before I turn in my taxes I make sure I have made a profit :) |
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