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Old 01-27-2011, 05:55 PM   #20 (permalink)
raiderguy10
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Join Date: Sep 2009
Location: Bismarck, ND
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Quote:
Originally Posted by kajshack View Post
Raiderguy, I know you aren't here to give free advice, but just a quick question: for the majority of us who spend way more than we take in with this "hobby", if we are organized as a sole-proprietorship we can deduct business losses and expenses such as supplies, etc correct?
If you are a sole proprietorship, and if you can legitimately prove to the IRS that you shouldn't classify it as a hobby, then yes your statement is correct. Getting an EIN for a sole proprietorship can go a long way in proving that (and it's free). But the burden of proof is on you to show it wasn't a hobby (ie you don't get personal pleasure from doing it on top TRYING to make a profit). You can't do it trying to create a tax shelter.
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