Schedule C loss

[imjulier]

Hey there-

Are there any other rules besides the hobby loss which would prevent someone from taking Sch. C loss to reduce overall income. I have a client where Husband and wife both make good money but tjhey want to creat a loss (with a photography business no less). Of course it sounds like a hobby but are there any other rules I'm not thinking about? Thanks for any input.

Julie

[Bob Hoffman]

Hey there-

Are there any other rules besides the hobby loss which would prevent someone from taking Sch. C loss to reduce overall income. I have a client where Husband and wife both make good money but tjhey want to creat a loss (with a photography business no less). Of course it sounds like a hobby but are there any other rules I'm not thinking about? Thanks for any input.

Julie

I'm not sure you need anything other "rule" but hobby loss restrictions. Is there a reason you need another? They have all but admitted to you that it will be a hobby.

[imjulier]

I'm not sure you need anything other "rule" but hobby loss restrictions. Is there a reason you need another? They have all but admitted to you that it will be a hobby.

Yes, but the client will want to do it anyway so I'm looking for other ways to convince them.

[JohnH]

Julie: You could tell them that if all they want to do is "create a loss" you can give them a tax-deductible invoice which they can pay. It's lots more efficient than buying all that photography equipment & having to put up with pesky customers just to get a tax break. Plus they won't have to worry about hobby loss rules.

[jainen]

>>I'm looking for other ways to convince them.<<

Hmmm, let's see. We're going to offset wages from two full-time jobs with a bunch of startup expenses, mostly for listed property, cars, and meals, for an activity that virtually everybody (including IRS auditors) does for personal pleasure. No, I can't think of any reason that wouldn't sail through unnoticed.

[imjulier]

Julie: You could tell them that if all they want to do is "create a loss" you can give them a tax-deductible invoice which they can pay. It's lots more efficient than buying all that photography equipment & having to put up with pesky customers just to get a tax break. Plus they won't have to worry about hobby loss rules.

John H - I really like this idea.