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Old 11-23-2012, 09:52 AM   #21
Shox Shox is offline
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Join Date: Mar 2005
Casino cash: $9211
Quote:
Originally Posted by Dave Lane View Post
Actually I think this would fall under hobby status and was not run for profit. Additionally you could treat it as a for profit company that made no money. Income - Expenses = 0. But really the IRS could care less about something like this that is obviously not for profit 501c3 status or not.
I'm a CPA and even if an endeavor is done for hobby purposes and the income is taxable, expense are an itemized deduction......this is the worst possible situation.

I think it could make an argument it is a gift and not taxable.

On the other hand the IRS could argue the money is taxable income or the service of communicating the views of chiefs fans to Clark and Chiefs management. But, the costs incurred would be deductible. Assuming you spend all or the majority of the funds on legit business expenses (i.e. banners ect) you would have no taxable income and accordingly no income tax liability.

I think I would just report the income and deduct the expenses.
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