Years ago, I was reading through the tax code, and I had a question, so I presented it to a tax attorney.
The attorney thought the question was a little bit overdone, yet at the same time, he could not dispute my reasoning. Without getting into the technical details of the US tax code, the basic summary is "receiving something of value after being required to do something at the direction of another IS INCOME." In this case it was about receiving a discount AFTER AND ONLY IF I fill out a survey. To receive the discount I was required to complete the survey. The bottom line is, yes, that 10% discount on my purchase is income under the US tax code, because I was required to do something at the direction of the other party. If I simply happen upon a 10% coupon, and need not do anything at the direction of the other party (other than present it), then the discount is not taxable under the US tax code. This crazy nonsense is not what the IRS is interested in, or at least my attorney assured me that there would be no problem if I "forgot" to report the discount after being required to fill out a survey. Then it was a bit about materiality, "Even if the IRS did find out about that 10% discount on a relatively small purchase, thus an even smaller amount of income, the IRS simply cannot spend time on this." I'm paraphrasing, but the basic idea is that the IRS has better things to do than worry about income related to survey discounts. > On 09/30/2024 7:03 PM PDT Michael or Penny Novack via gnucash-user > <[email protected]> wrote: > > > 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 > > > _______________________________________________ > gnucash-user mailing list > [email protected] > To update your subscription preferences or to unsubscribe: > https://lists.gnucash.org/mailman/listinfo/gnucash-user > ----- > Please remember to CC this list on all your replies. > You can do this by using Reply-To-List or Reply-All. _______________________________________________ gnucash-user mailing list [email protected] To update your subscription preferences or to unsubscribe: https://lists.gnucash.org/mailman/listinfo/gnucash-user ----- Please remember to CC this list on all your replies. You can do this by using Reply-To-List or Reply-All.
