hobby loss


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hobby loss

n. in income tax, a loss from a business activity engaged in more for enjoyment than for profit, which can be deducted against annual income only.

References in periodicals archive ?
20) Two recent cases, both dealing with the common hobby loss from horse-related activities, illustrate the court's methods for assessing the taxpayer's QuickBooks records and how the use to which those records are put can produce opposite results.
If the activity is not engaged in for profit, it is subject to the hobby loss rules in Sec.
Not surprisingly, the primary use of the hobby loss provision has
Conversely, the hobby loss rules act to prevent the expensing of what otherwise would be personal expenses disguised as "valid" business expenses, thereby causing significant losses of revenue to the Treasury.
The test instrument was based on the facts found in a 1988 Tax Court case (Kimbrough, 55 TCM 730) focusing on the hobby loss vs.
Aggregating activities to avoid the hobby loss rules.
Equinomics 101 instructs horse owners how to minimalize hobby loss.
The Tax Court disallowed an IRS auditor's deductions for breeding greyhounds as a hobby loss.
The court held that they were an integrated activity, given their organizational and economic interrelationships, and that the horse activity was therefore not a hobby loss.
unearned income, hobby loss rules, preferential rates for capital gains, and the antiquated and punitive $3,000a-year capital loss limitation.
Proper grouping may help a taxpayer avoid the application of the hobby loss rules.
In one recent case, however, the Tax Court accepted that two seemingly dissimilar undertakings could be treated as a single activity for purposes of the section 183 hobby loss rules.