tax write off for fishing

bmshepherd · Post by **bmshepherd** » Thu Feb 10, 2011 8:30 am

does anyone know, since you have to pay taxes on money won in fishing tournaments, can you write off any expenses involved...like tackle, gas, entry fees....???

ASD · Post by **ASD** » Thu Feb 10, 2011 10:03 am

For 99% of fishermen NO!! You would be better to ask "your" CPA this then on a forum.

If you write it off and you should not have the irs will look so fare up your a$$ they will also be able to cheak out your teeth

and the my friend will cost you way more then most people spend on their "hobbys"

Steve Reed · Post by **Steve Reed** » Thu Feb 10, 2011 10:27 am

All I can say is.... good luck. You wonder why some guides are only such by title...

I know of a couple ways to work with it, but consult a good cpa. I know a few pro anglers use the same one and if you are seriously considering it then I'll track down the info.

Also, look into the hobby writeoff. I believe its up to 5k worth of hobby earnings, but be prepared to get audited.

Still working with the IRS on the fantasy fishing prize I won... Kind of wish I had finished a few spots lower, or 2 spots higher

.

Smitty · Post by **Smitty** » Thu Feb 10, 2011 12:05 pm

I wrote a post earlier and deleted it because this topic always causes arguments. Yes you can. Two options. Hobby expense vs Hobby income. Your best bet for a full time employed person or someone who owns another business. You can take expenses up to the amount of income if you have it. (Similar to taking documented gambling losses vs gambling income). Option two is full sch c business write off. With this option you should have a substantial portion of your income come from fishing, spend a significant amount of time, and have seperate checking, credit card etc...If you attempt to show a loss, your odds greatly increase of being audited. Remember you have the legal right to take a tax position, however in an audit you must be able to provide significant documentation etc...
Smitty

careyj1 · Post by **careyj1** » Thu Feb 10, 2011 12:08 pm

The following is from the IRS website:

Is Your Hobby a For-Profit Endeavor?

FS-2008-23, June 2008

The Internal Revenue Service reminds taxpayers to follow appropriate guidelines when determining whether an activity is engaged in for profit, such as a business or investment activity, or is engaged in as a hobby.

Internal Revenue Code Section 183 (Activities Not Engaged in for Profit) limits deductions that can be claimed when an activity is not engaged in for profit. IRC 183 is sometimes referred to as the “hobby loss rule.”

Taxpayers may need a clearer understanding of what constitutes an activity engaged in for profit and the tax implications of incorrectly treating hobby activities as activities engaged in for profit. This educational fact sheet provides information for determining if an activity qualifies as an activity engaged in for profit and what limitations apply if the activity was not engaged in for profit.

Is your hobby really an activity engaged in for profit?

In general, taxpayers may deduct ordinary and necessary expenses for conducting a trade or business or for the production of income. Trade or business activities and activities engaged in for the production of income are activities engaged in for profit.

The following factors, although not all inclusive, may help you to determine whether your activity is an activity engaged in for profit or a hobby:

Does the time and effort put into the activity indicate an intention to make a profit?
Do you depend on income from the activity?
If there are losses, are they due to circumstances beyond your control or did they occur in the start-up phase of the business?
Have you changed methods of operation to improve profitability?
Do you have the knowledge needed to carry on the activity as a successful business?
Have you made a profit in similar activities in the past?
Does the activity make a profit in some years?
Do you expect to make a profit in the future from the appreciation of assets used in the activity?
An activity is presumed for profit if it makes a profit in at least three of the last five tax years, including the current year (or at least two of the last seven years for activities that consist primarily of breeding, showing, training or racing horses).

If an activity is not for profit, losses from that activity may not be used to offset other income. An activity produces a loss when related expenses exceed income. The limit on not-for-profit losses applies to individuals, partnerships, estates, trusts, and S corporations. It does not apply to corporations other than S corporations.

What are allowable hobby deductions under IRC 183?

If your activity is not carried on for profit, allowable deductions cannot exceed the gross receipts for the activity.

Deductions for hobby activities are claimed as itemized deductions on Schedule A, Form 1040. These deductions must be taken in the following order and only to the extent stated in each of three categories:

Deductions that a taxpayer may claim for certain personal expenses, such as home mortgage interest and taxes, may be taken in full.
Deductions that don’t result in an adjustment to the basis of property, such as advertising, insurance premiums and wages, may be taken next, to the extent gross income for the activity is more than the deductions from the first category.
Deductions that reduce the basis of property, such as depreciation and amortization, are taken last, but only to the extent gross income for the activity is more than the deductions taken in the first two categories.

mrobinett · Post by **mrobinett** » Thu Feb 10, 2011 12:25 pm

Why give them any reason to look? They won't just stop at your "hobby".

Ray Coleman · Post by **Ray Coleman** » Thu Feb 10, 2011 2:37 pm

Smittys is right. Exactly the way I did it. Smart to get your accountant involved.

Peacheater81 · Post by **Peacheater81** » Thu Feb 10, 2011 2:49 pm

I did it as a freelance musician. The only catch is you can't show a loss 3 years in a row. Keep your receipts!

bassman1975 · Post by **bassman1975** » Thu Feb 10, 2011 4:01 pm

I checked with my tax rep who has been doing my taxs for years. She said only if Bass Fishing is my full time job. I purchased a boat that year and fished some tournaments and kept all my receipts but she told me no.

Nitro5150 · Post by **Nitro5150** » Fri Feb 11, 2011 8:16 am

Hey guys- Just a quick note. for those of you that fish things like the Cooche's Pro Teen event or C.A.S.T. for kids events, there are right offs with those because your donating time and money. Launch fees, lodging, and mileage are all deductable as charitable donations. its not much, but its there. J