Avoiding Hobby Loss Classification: Meeting the Nine Factor Test, the 183(d) Safe Harbor, and Withstanding IRS Challenges
Recording of a 110-minute CPE webinar with Q&A
This course will discuss positioning businesses to satisfy the nine-factor criteria under Reg Sec 1.183-2(b) to avoid classification as a hobby. Our panel will discuss how the courts have historically interpreted and weighed these factors so tax professionals can identify potential hobby loss exposure and challenge a hobby loss classification if audited.
Outline
- Hobby losses: an overview
- The nine factors
- Meeting the safe harbor
- IRS hobby loss audits and appeals
- Proactive planning for losses
- Recent and landmark cases
Benefits
The panel will review these and other key issues:
- Preventing a business from being classified as a hobby
- Demonstrating a profit motive
- Completing, and when to complete, Form 5213 to postpone safe harbor determination
- Meeting the nine factors outlined in Regulation Section 1.183-2(b)
- Lessons learned from recent hobby loss cases
Faculty
S. Gray Edmondson
Partner
Edmondson Sage Allen
Mr. Edmondson practices in partnership, corporate, and individual tax planning; business transactions, including... | Read More
Mr. Edmondson practices in partnership, corporate, and individual tax planning; business transactions, including mergers and acquisitions; business planning; tax controversy; estate and wealth transfer planning; probate; estate and trust litigation; asset protection; and charitable planning. He has conducted, authored, and directed numerous seminars for professional, academic, and civic groups on taxation, business, asset protection and estate planning.
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Kreig D. Mitchell, LLM, JD
Attorney/Managing Director
Mitchell Tax Law
Mr. Mitchell focuses on various state and federal tax matters and related business and probate matters, including tax... | Read More
Mr. Mitchell focuses on various state and federal tax matters and related business and probate matters, including tax procedural issues, questions about tax attributes, timing, character, and penalties and interest; structuring business and real estate transactions, including buying, selling, leasing, and other transfers and dispositions; tax planning for corporate and flow through entities; partnership tax issues, including partnership agreements and allocations; research tax credit issues, including qualification and funded research analysis. Previously, he worked for the IRS as an attorney and then an appeals officer. He’s led a tax controversy team for a boutique consulting firm, worked in the tax departments for two Fortune 500 companies, and worked for one of the Big Four accounting firms.
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Peter J. Reilly, CPA
Consultant
Mr. Reilly began working in public accounting in 1979 with Joseph B Cohan & Associates, a large local firm based in... | Read More
Mr. Reilly began working in public accounting in 1979 with Joseph B Cohan & Associates, a large local firm based in Worcester Mass. He was one of the founding partners of CCR, a New England regional firm that ran from 1997 till 2011, when its practice was sold to Grant Thornton. After a brief tenure at Grant Thornton, Mr. Reilly worked in a boutique practice until retiring from active practice in 2018. He now focuses on writing and consulting. Mr. Reilly has been a contributor to Forbes.com since 2011 and has had his own platform, now called Your Tax Matters Partner, since 2009. He covers a wide range of federal and state income tax issues.
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