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Tax Prof said.....

You can use section 179 to expense the equipment, but your deduction would be limited to the amount of income. You couldn't use it to create a loss, only reduce income from music to $0.

That's not quite true. This person has a salary in addition to income from music. He can not deduct more than his taxable income from all active trades or businesses. This includes his salary as an employee. Therefore, he can do more than reduce income from music to $0.

Then jailleres said..........

As for deducting equipment: First, your business (musician)has to be profitable 2 years out of 5 or the IRS will deem it a hobby and you will owe the taxes back plus interest. You must show that you intend to make a profit.

That also overstates the case. The IRS does provide a safe harbor if you are profitable in 2 years out of 5 to protect you from having the hobby loss provisions applied, but that does not mean that if you don't meet that test, your deductions will automatically be denied. If you can prove by other means that you are engaged in the transaction for profit, you will be able to deduct the item.

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