17 Oct
2007
17 Oct
'07
4:36 p.m.
On Wed, 17 Oct 2007 scheefj at netscape.net wrote:
Grant,
When I was a sole proprietor of a similar business, I was told that the
business had to make money at least once in every three years for the
losses to be deducible from ordinary income.
WHO told you that?
It ain't true, and there have been a few BIG businesses that have had more
than 2 successive years of losses.
BUT, . . .
there is the issue of whether the IRS will believe that it is a business,
not a hobby. IF you always lose money (less than 1 in 3 profitable, or
less than 2 out of 5, etc. depending on the agent), then they are MUCH
more likely to take a look at whether or not they'll believe that it is a
"real" business.