Re: You can calim tournamant expenses on your taxes??!
Okay, here's the deal:<br /><br />Your fishing activity is either a business or a hobby.<br /><br />If it's a business, you deduct all expenses related to it; if the expenses are greater than your income (tourny prizes, guide fees), you can deduct the net loss. If income is greater, you pay income tax plus self-employment tax on the net profit.<br /><br />If it's a hobby, you can use expenses to offset the income; if the income is greater, you pay income tax but not self-employment tax on the net profit. If expenses are greater, you may not deduct the net loss.<br /><br />What you said about keeping records, etc. is absolutely correct. Bottom line, if you treat it like a business, approach it in a business-like manner, then a business it is. That's the law. If you never make a profit, never even finish in the money, the IRS will take the position that you have a hobby and disallow your losses if you get audited. You'll have to convince 'em otherwise.<br /><br />Say you fish a few tourneys for fun, and one year you hit the jackpot, win the boat. Get a 1099 saying you have $30,000 of income...then you pull out every single thing you spent on fishing that year...all the "practice", everything, not just tournament expenses, use it to reduce your tax for the year. Then, refile amended returns for the last two years showing net losses, get refunds for those years. And do the same for next year. A big profitable year in the middle of a few loss years is just normal business activity. That's how to work the system. It's why it pays sometimes to have a CPA do your taxes.
<br /><br />Being stupid stinks.<br /><br /><br />spots (duh)
