Skip to main content
Message Font: Serif | Sans-Serif
No. of Recommendations: 0
I am hung up on this. Rule says if you don't make a profit in 3 of the past 5 yrs you are a hobby. When I start my Scedule C for example:
Gross receipts are $11,000
Enter expenses of $5000
It appears in my mind that a profit of $6000 was made.
Here is where I get hung up!
When entering depreciation, the profit then becomes a negative. The depreciation is spread over 5 yrs so net profit & loss on Schedule C would be a loss over 3 of the last yrs. Does that make this business a hobby?
Thanks for any help! Carol
Print the post  


In accordance with IRS Circular 230, you cannot use the contents of any post on The Motley Fool's message boards to avoid tax-related penalties under the Internal Revenue Code or applicable state or local tax law provisions.
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.