Expensing Hunting through business LLC

[fwafwow]

My super anti tax, good old boy CPA always said, the richest people he knows, pay the most taxes. I got audited once and it sucks. Lots of this stuff can be a penny wise and a pound foolish.

^^^this. Audits suck. Going to Tax or District Court if the audit doesn’t work out sucks a$$. Some super rich folks in the late 90s thought they learned a few ways to reduce their taxes. Son of Boss, CARDs and BLIPs were some of the technique names. In the end it didn’t work out well for the taxpayers or the accountants. Similar story playing out now with syndicated conservation easements.

 

[ResearchinStuff]

Real life story.

When my wife and I got married, the bank gave us $50 for opening a joint checking account. They sent the irs a 1099 for that $50, but either did not send me one, or usps lost it in transit (I had another 1099 3 years later get lost by usps and show up in late April bent and ripped with tire tracks on the envelope).

I was audited for not claiming all my "income" about 4 years after we were married. With all the fees, fines, and interest, that "free" $50 cost me 2300+. Eff with those bastards at your own risk, they do not play around.

Hopefully Daddy cans them all and shutters that agency here in a few months.

 

[ODB]

Im curious with the folks getting audited, I take it you are not single-member LLCs that run your P&L through your personal income?

 

[ResearchinStuff]

I didn't even have an llc when I was audited.

 

[fwafwow]

Similar to a post made by @Marbles above, the existence of an LLC does not make an activity a business, or the costs and expenses deductible. And as @StuckInTheEast mentioned, if something is a deductible expense, it's not free - the benefit is only equal to the tax rate times the cost. So think about all of the effort (and expense) you have to go to in order to even put on the show that you have a new business - whether it's selling sawdust in Ziplocs, or paying to create and maintain an LLC or other entity. Sure, you could say there wasn't much cost in either of those examples, but that's going to haunt you if you are ever explaining your "business" start-up and other costs to an agent.