Learn how the IRS distinguishes hobbies from businesses, key criteria, tax implications, and strategies to prove a profit motive.
By attending this presentation on Hobby Loss Rules, participants will gain a clear understanding of how the IRS distinguishes between a profit motivated business activity and an activity that is for personal enjoyment and tax benefits. You will learn the tax implications of that classification and the potential financial consequences of misreporting. The session will cover key IRS criteria, real-world court cases, and practical strategies for proving a profit motive to ensure compliance and avoid costly audits or penalties. Whether you're a small business owner, freelancer, or someone earning income from a passion project, this presentation will provide essential insights to help you maximize deductions legally and safeguard your financial interests.
Learning Objectives
- You will be able to differentiate between understanding IRS classification of hobby vs business expenses
- You will be able to identify tax implications and risks of misclassifications
- You will be able to recognize the strategies to prove profit motives
- You will recognize real world court cases and compliance tips
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Why Lorman?
Over 39 years and 1.4 million customers worth of experience providing continuing education. Our passion is providing you world-class training to help you succeed in business and as a professional.
Agenda
Introduction to Hobby Loss Rules
- Overview of Hobby vs. Business
- Purpose of Hobby Loss Rules
Key Criteria for Determining Hobby vs. Business
- IRS - Key Questions Consider
- Relevant Court Cases
Tax Implications of Hobby Income and Expenses
- Income Reporting Requirements
- Deduction Limitations for Hobby Expenses
- Relevant Court Cases
Strategies to Prove Profit Motive
- Best Practices for Establishing Business Intent
- Case Studies and Court Cases
Risks of Non-Compliance
- IRS Audits
- Penalties for Misclassification
- Relevant Court Cases
Q&A Session
Conclusion and Takeaways
- Summary of Key Points
- Resources for Further Learning
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Why Lorman?
Over 39 years and 1.4 million customers worth of experience providing continuing education. Our passion is providing you world-class training to help you succeed in business and as a professional.
Credits
OnDemand Course
This course was last revised on April 23, 2025.
Call 1-866-352-9540 for further credit information.
- AIPB 2.0
- This program is acceptable for 2.0 CPEC(s) towards the CB designation through the American Institute of Professional Bookkeepers (AIPB).
Enrolled Agents 2.0
- In accordance with the standards set forth in Circular 230 section 10.6, CE credits have been granted based on a 50-minute hour. This program qualifies for 2.0 Continuing Education Credit(s) for enrolled agents.
CPE/NASBA - QAS Self Study 2.6 including Taxes 2.6
- Noggin Guru, Inc. dba Lorman Education Services and BankersHub is registered with the National Association of State Boards of Accountancy (NASBA) as a QAS Self Study sponsor of continuing professional education on the National Registry of CPE Sponsors. State boards of accountancy have final authority on the acceptance of individual courses for CPE credit. Complaints regarding registered sponsors may be submitted to the National Registry of CPE Sponsors through its web site: www.nasbaregistry.org. For more information regarding administrative policies such as complaint and refund, please contact our offices at 866-352-9539. CPE Credit: Maximum Credit Hours: 2.6 each session (based on a 50 minute credit hour). You must attend at least 50 minutes to obtain credit. Field of Study: Taxes for 2.6 hours. Prerequisite: . Level of Knowledge: Intermediate. Teaching Method: Seminar/Lecture. Advance Preparation: None. Delivery Method: QAS Self Study. Please refer to the information in this advertisement for outline, course content and objectives. Upon completion of this course, you will receive a certificate of attendance. Final approval of a course for CPE credit belongs with each state's regulatory board.
MP3 Download
This program does NOT qualify, nor meet the National Standard for NASBA accreditation.
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Why Lorman?
Over 39 years and 1.4 million customers worth of experience providing continuing education. Our passion is providing you world-class training to help you succeed in business and as a professional.
Faculty
David P. Smith, CPA, MBA, CM&AA
Smith Patrick CPAs
- Managing Partner of Smith Patrick CPAs
- Experienced CPA and Business Advisor
- Specializes in financial strategies for business transactions and growth, helping business owners make informed financial decisions
- Recognized speaker, author, and media contributor, presenting on tax law, financial reporting, and business strategy at professional conferences and universities; published in Asset Magazine and featured on Saint Louis on the Air discussing complex financial topics
- Serves as Chair of the Missouri Society of CPAs (MOCPA) Legislative Committee, Treasurer of the Missouri Cannabis Trade Association, and is involved in the leadership of several community organizations, including the Old Webster Square Commission and Lighthouse for the Blind
- M.B.A. Degree in finance, Indiana University; B.S. Degree in engineering, Purdue University
- Certified Public Accountant (CPA), Certified Merger & Acquisition Advisor (CM&AA), and Registered Investment Advisor (RIA)
- Can be contacted at [email protected] or 314-961-1600
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More Program Information
Why Lorman?
Over 39 years and 1.4 million customers worth of experience providing continuing education. Our passion is providing you world-class training to help you succeed in business and as a professional.
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