04-19-2004, 07:27 PM
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 Re: Business vs Hobby Losses DH wrote: - quote - > In 2001 an individual started a for profit farming activity.
If the taxpayer's intent was to make a profit, there is no> He kept his regular job. > In 2001 - $22,000 was invested in depreciable assets > - $3,350 was incurred in expenses > - $563 was claimed for depreciation > - ZERO sales > - loss Of $3,913 charged against regular income > In 2002 - $26,000 was invested in depreciable assets > - $452 was incurred in expenses > - $5,517 was claimed in depreciation > - ZERO sales > - loss of $5,969 charged against regular income > Because of failure to generate profit he discontinued the for profit > activity after 2002. > What action must he take, if any, for the losses he used to offset his > regular income in 2001 and 2002? action to take. He should maintain all the records associated with this activity in case he is audited. Regards, Bill ~~~~~~~~~~~~~~~~ William P. Brown, PhD, CPA College of Business & Economics Longwood University http://www.longwood.edu/staff/wpbrown Opinions in this message are mine, and are not necessarily shared by my employer. << -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << -------------------------------------------------> |
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#-1
04-12-2004, 07:38 AM
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| Business vs Hobby Losses In 2001 an individual started a for profit farming activity. He kept his regular job. In 2001 - $22,000 was invested in depreciable assets - $3,350 was incurred in expenses - $563 was claimed for depreciation - ZERO sales - loss Of $3,913 charged against regular income In 2002 - $26,000 was invested in depreciable assets - $452 was incurred in expenses - $5,517 was claimed in depreciation - ZERO sales - loss of $5,969 charged against regular income Because of failure to generate profit he discontinued the for profit activity after 2002. What action must he take, if any, for the losses he used to offset his regular income in 2001 and 2002? I appreciate your comments and suggestions << -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << -------------------------------------------------> |
| Tags |
| business, hobby, losses |
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