Hi Michael, A point of clarification:
> Here in the US if your hobby does produce an income, that IS taxable, > but because a hobby, expenses count only toward reducing that income. In > other words, losses from the hobby cannot be used to offset other > income. For this reason, the tax folks will usually try to judge the > activity as hobby if not making profits X years out of Y. Understand? > YOU can end up owing them more taxes if "hobby" rather than business but > never the other way around. So even if I planned the activity as a hobby > I would want to keep the books correctly for a business. I concur in part. In a "hobby", expenses are no longer deductible to the extent of income, as you said, however, if you have "hobby" income, then maybe you really have a nascent business. Who's to say? Account for the hobby like a business, and deduct expenses, to the extent of income. Be judicious. This is another reason why acquisition and deployment expenses are debited to the asset -- so they don't show as expenses until there is income corresponding to a sale. Of course expenses that are not related to asset acquisitions and deployment, like maybe a training course on restoration, would be a deductible expense. Of course, all the this shady "gray area" vanishes if your hobby is profitable. -- Chris. _______________________________________________ gnucash-user mailing list [email protected] To update your subscription preferences or to unsubscribe: https://lists.gnucash.org/mailman/listinfo/gnucash-user ----- Please remember to CC this list on all your replies. You can do this by using Reply-To-List or Reply-All.
