Just a hobby.
Well many/most of our hobbies are not "at risk" of producing income. And
jurisdictions differ.
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.
Look, some people buy/fix up/sell houses "flip houses" ----- big money
can be involved so ruled hobby or business could matter (and THIS
example complicated if only one at a time and they occupy "their residence")
Some people buy the remains of cars found in barns, restore the
antiques, show them in competitions -- then sell to begin again. Might
have a number in various stages of the process. Again, hobby or business
can have tax consequences.
Michael D Novack
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