Business or Hobby-Any activity carried as a business activity or hobby has different tax implications. In order to make this determination, taxpayers should consider the following factors: •Does the time and effort put into the activity indicate an intention to make a profit? •Does the taxpayer depend on income from the activity? •If there are losses, are they due to circumstances beyond the taxpayer’s control or did they occur in the start-up phase of the business? •Has the taxpayer changed methods of operation to improve profitability? •Does the taxpayer or his/her advisors have the knowledge needed to carry on the activity as a successful business? •Has the taxpayer made a profit in similar activities in the past? •Does the activity make a profit in some years? •Can the taxpayer expect to make a profit in the future from the appreciation of assets used in the activity?
Posted on: Tue, 08 Jul 2014 14:39:10 +0000
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