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YOU KNOW YOU REALLY HAVE A HOBBY LOSS PROBLEM WHEN...

August 22, 2008

Earlier this week the IRS discussed the factors they look at to see whether a business has a real profit objective under the "hobby loss" rules. As a public service, the Tax Update reveals the secret factors that tell the IRS there REALLY is no profit objective.

* You tell the IRS that you need your Learjet to get from West Des Moines to Altoona for your business of slot machine gambling.

* You hold "board meetings" for your Mary Kay sole proprietorship in Aruba and Switzerland.

* "Financial records? We don't need no stinking financial records."

* Your business is a stand that sells celery sticks, carrots and "meat is murder" t-shirts at the Iowa State Fair.

The emergency nicotine relief wagon at the 2008 Iowa State Fair. The deep-fried Oreo wagon beckons in the background.