Does anyone write off their tank expenses?

[The Saltman]

Hi guys,

Does anyone write off your aquarium expenses or energy that it costs to run your tanks? Just wondered if there was a way to do it.

[dc]

Can't do that, Dan would know how much everything cost.

[kfisc]

I write it off to being an oddball....

[dc]

good choice...

[drauka99]

ummm what section of the 1040 would you file a hobby using expendable income ? how are you planning on using that as a justifiable expence?

Try it and if we don't see you around we'll know why

[dwd5813]

HA! if you ever figure that one out let me know.

[Scuba_Dave]

Only way is as a hobby selling corals
You need to make a profit 3 years out of 5
Then can write off deductions
So 2 years you can lose money & claim expenses
The other 3 years you must claim a profit & pay taxes

Very hard to makea profit selling enough corals to offset expenses unless you do it on a large scale......which raises expenses...and takes the fun out of it

[hubris007]

In addition, if you somehow DON't make a profit during those 5 years, they audit you and nail you for back taxes.

It is do-able to write off the tank expenses (and mileage to inland aquatics, and the national reef conventions), but it's a bit of a gamble if you don't make a profit.

[BrianD]

I am thankful for advice like the above. It keeps me in business. Of course, it also keeps the IRS employees employed.

[Eldredge]

I think you could probably deduct a display tank at work in a waiting area for clients etc.

[GSMguy]

Originally posted by Eldredge
I think you could probably deduct a display tank at work in a waiting area for clients etc.

Nope, even if you install a tank at mcdonalds Corporate HQ u will go to jail. if you enjoy Saltwater fish, I reapeat if you think its a hobby you will go to jail....

Isn't that basically what everyone else said???


I bet dudesters 450g office reef tank was fully deductible, you guys and gals that have offices your allowed to decorate them.. your also allowed to write off the cost of decoration DUH DUH DUH

[BrianD]

What?

[Eldredge]

Originally posted by GSMguy
Nope, even if you install a tank at mcdonalds Corporate HQ u will go to jail. if you enjoy Saltwater fish, I reapeat if you think its a hobby you will go to jail....

Isn't that basically what everyone else said???


I bet dudesters 450g office reef tank was fully deductible, you guys and gals that have offices your allowed to decorate them.. your also allowed to write off the cost of decoration DUH DUH DUH

I don't understand what you are saying here. You seem to disagree at first, and then say it is deductible? Maybe I am missing some sarcasm.

[dkh0331]

Originally posted by GSMguy
Nope, even if you install a tank at mcdonalds Corporate HQ u will go to jail. if you enjoy Saltwater fish, I reapeat if you think its a hobby you will go to jail....

Isn't that basically what everyone else said???


I bet dudesters 450g office reef tank was fully deductible, you guys and gals that have offices your allowed to decorate them.. your also allowed to write off the cost of decoration DUH DUH DUH

Pass the vodka that you're pouring into your OJ this way please.

[pnosko]

I believe hobby expenses are deductible, as long as they don't exceed hobby income (IOW, no loss against total income).

[pnosko]

Not to put Brian out of work, but...

http://www.irs.gov/faqs/faq12-7.html

[BrianD]

The main fallacy is the belief that a certain number of years of income/loss can cause an activity to be deemed a hobby or a business. You don't "have" to make a profit to be a profit-motivated business (look at Chrysler).

[pnosko]

No, and while I agree that the "making profit in 3 out of 5 rule" is more anecdotal than factual, Chrysler isn't a good analogy here either. For someone that wants to make a business out of their hobby to help support/defray the costs, I think the above "rule" isn't unrealistic. If you started such a business and go 2-3 years with a loss, I would think the IRS is going to ask why you are continuing to pay out of pocket to stay in business.

[BrianD]

It isn't an "anecdotal" rule. It is a standard the IRS uses to shift the burden of proof from the IRS to the taxpayer. It won't come into play unless there is some evidence that the activity is likely a hobby.

[pnosko]

Is it a written rule in an IRS publication?

[hubris007]

Originally posted by GSMguy
Nope, even if you install a tank at mcdonalds Corporate HQ u will go to jail. if you enjoy Saltwater fish, I reapeat if you think its a hobby you will go to jail....

Isn't that basically what everyone else said???


I bet dudesters 450g office reef tank was fully deductible, you guys and gals that have offices your allowed to decorate them.. your also allowed to write off the cost of decoration DUH DUH DUH

I'm going to jump on the bandwagon and say...."huh?"
Could you, perhaps, check your punctuation and edit a little bit so the rest of us could understand what you are trying to convey?




I would definately think that the inital cost and maintenance of a tank in a doctor's office would be fully deductable.

[psychodave]

If you are self employed and have the tank in your office cant you write it off as a decoration? I know I wrote off the paintings in my home office as decorations...never asked about the tank though...

[BrianD]

Originally posted by pnosko
Is it a written rule in an IRS publication?

There are two ways to avoid the hobby loss rules. The first way is to show a profit in at least three out of five consecutive years (for Nina, two out of seven years for breeding, training, showing, or racing horses). The second way is to run the venture in such a way as to show that you intend to turn it into a profit-maker, rather than operate it as a mere hobby. The IRS regs themselves say that the hobby loss rules won't apply if the facts and circumstances show that you have a profit-making objective.

In other words, if it is demonstrated that you truly have the intent and the ability to make a profit, you can avoid the hobby loss limitations.

As an example, let's say you are a professional model-airplane flyer. You spend thousands and thousands of dollars on equipment, but your only hope for any revenue is the $50 grand prize at most contests. Even if you enter a contest every week and win every one, you have no hope of ever covering your expenses. In those facts and circumstances, you are deemed to be engaged in a hobby and the expenses are not deductible.

If you change the circumstances a bit, and you also modify and build your airplanes, and you take them to competitions in hopes of selling your designs. You have years of experience in flying airplanes, and you have set up separate bank accounts for your business. You engage professional advice on how to best market your talents and your products. In those facts and circumstances, even if you lose money every year for 20 years, you would not necessarily be deemed a hobby.

[BrianD]

Originally posted by psychodave
If you are self employed and have the tank in your office cant you write it off as a decoration? I know I wrote off the paintings in my home office as decorations...never asked about the tank though...

The IRS doesn't necessariy list expenses that are "ok" to deduct. If a business expense is "reasonable and customary", it it normally allowable.

[BrianD]

PS "reasonable and customary" are IRS words that they don't define. Much of income tax law is in a definite shade of gray.