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Robin D.
Robin D., Senior Tax Advisor 4
Category: Tax
Satisfied Customers: 15342
Experience:  15years with H & R Block. Divisional leader, Instructor
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Dear JustAnswer:My wife & I file (tax) jointly - as a musician/son

Customer Question

Dear JustAnswer:
My wife & I file (tax) jointly - as a musician/songwriter/record producer - mine is the smaller annual income. On my Schedule C I have shown a loss the past 7 years avrg: $4945 - this includes fees paid to musicians, recording studios, records released, prof. assts, graphics, videos, website, promotion & other. I am concerned whether this could cause irs to audit and/or put me in "hobby" category - which, in fact, is not the case!
What is your advise in this matter?
Thank you very much.
Submitted: 1 year ago.
Category: Tax
Expert:  Robin D. replied 1 year ago.
HelloGenerally, an activity qualifies as a business if it is carried on with the reasonable expectation of earning a profit.There are nine points that assist in defining the activity but for you one stands outWhether you can expect to make a future profit from the appreciation of the assets used in the activity.Actually it is will your future income be realized based on the work now that is a loss. The future royalties on the songs perhaps.
Customer: replied 1 year ago.
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