Accountants Who Come To Us For Guidance
David M. Kaufmann, CPA
2831 Wyecliff Way
Highlands Ranch, CO 80126
PO Box 632285
Highlands Ranch, CO 80163-2285
You love coaching your kids baseball teams, and you have
decided to make an instructional video about pitching.
Your first year's sales are a disappointment, and this
activity has lost money.
The IRS decides to audit the return.
Generally, if you can prove that you have a profit motive,
the losses are deductible.
If your business is profitable for 3 out of 5 years, it is
assumed that you do have a profit motive.
How do you prove a profit motive?
Before you start your business, discuss it with me.
I can give you a list of things to do that the IRS has indicated shows a
tendency to have a profit motive. Setting up the business properly from the
start can make all the difference in the world.
Have me prepare the proper paperwork that you will go
along with the 3 out of 5 year rule.
I can represent you a the IRS audit. The chances of
success improve if you followed the list of steps I gave you before you
started your business [Solution A].
You have to prove that you had a profit motive. The IRS
does not have to prove that you didn't have a profit motive.