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Subject: Re: Writing off gear?

In article <1148324814.000494.196750@i39g2000cwa.googlegroups.com>, Bill
Hilton writes
>> Carlo Coggi writes ...
>>Two months ago I sold my Canon 10D and bought a 30D and some related
>>camera gear. If my photos and text are accepted for publication, can I
>>then form a sole proprietorship or corporation and *retroactively*
>>write-off the cost of my gear and trip?
>Assuming you're in the US you have two options once you rake in some
>bucks thru your photography ... one option is to declare the income as
>'hobby income' and report it on (I think) line 21 of your 1040, then
>you can declare expenses *up to that amount* (but not over) if you
>itemize deductions. If you do not itemize deductions then you have to
>report as income the full amount. Google on 'hobby income photography'
>or similar for specifics. There's quite a bit of useful info on this
>on the web, including IRS publications.
>The other option is to declare a "business" for your photography, in
>which case you file a separate form listing all your income, expenses,
>depreciations etc. You can have a loss here and use it to off-set
>other earned income, BUT (gigantic but) you need to be able to
>demonstrate you are running this like a business and trying to make a
>profit, not using it as a tax write-off. If doing this option you
>should consult a tax attorney since using photography as a tax
>write-off is something the IRS lads look for and it could easily
>trigger an audit if you have several years of low income and high
>expenses leading to losses applied to other earned income.
>> ... write-off the cost of my gear and trip?
>In both of these scenarios you can write off the costs of the trip if
>you sold an article about it (if hobby income, can only write off
>expenses up to the amount of income) but in neither of these scenarios
>could you write off any gear you sold earlier before you took the trip
>or decided you were a "business".
>If you make a lot from selling a story about the trip it's worth
>consulting an accountant but if it's under a few thousand dollars it's
>simpler to report it as hobby income unless you'll be doing this often.
>Bill (not a tax attorney so consult one before blindly following this
>advice, but I've researched this issue before ...)
Wow, that's a very useful provision. Wish we had one like it here!

David Littlewood


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