Program Content

This online learning program, presented as a live webcast, will be also archived for QAS Self Study. The program will be available for viewing for 12 months after the live webcast. A panel of IRS and industry experts will present the content during a live, interactive discussion, where participant questions can be submitted. Questions will be answered live on the program or posted on the Resources page.

The program, through a lively round-table discussion and real time interaction with the audience, focuses on what distinguishes a business from more casual activities. The program will explore factors the IRS considers in making the decision on whether an activity is a business or a hobby. Panelists will examine the restrictions on deductions generated by an activity that fails to rise to the level of a business. The discussion will also zero in on the presumption as to whether an activity is a business or not, and the election that allows the taxpayer to extend the time in which that presumption is applied. The panel also will explore some special situations and the tax adjustment and penalties that may apply when a taxpayer incorrectly treats a hobby as a business.

By the end of the program, participants will have a practical understanding, through accurate, current, and effectively designed communications, of the "hobby loss rules" and the distinction between an actual business and an activity that lacks a true profit motive.

Program Learning Objectives

1. Identify the requirements for deducting expenditures as business expenses.
2. Identify the factors that are considered in determining whether an activity is a business or hobby.
3. Identify the presumption that applies to an activity that it is a business.
4. Identify the special situations covered by the hobby loss rules and the tax adjustment that occurs when an activity is determined not to be a business.

Program Outline

Requirements for Deducting Business Expenses

• Profit Motive
• Trade or Business
• Ordinary and Necessary

The Nine Factors

• Manner
• Expertise
• Time and Effort
• Expectation of Appreciation
• Success in Other Activities
• History
• Amounts of Occasional Profit
• Financial Stake
• Personal Pleasure or Recreation

Activity Not-for-Profit (Section 183)

• General Rule
• Allowable Deductions
• Presumption
• Election to Postpone

Special Situations

• Multiple Activities
• Farming and Farmland

Tax Adjustment

• Penalties