A friend is in transition from one career to genealogical/historical research. This is the first year his business has shown a profit, a considerable profit. One of his colleagues informed him that his work for clients at the North Carolina State Archives and Library is not income tax deductible. Once again, I turn to the folks on this list to answer a question for a friend. Is client-based Archival research income tax deductible? Thank you for your time and help. Kizzie

Kizzie, If your friend is doing this research as a legitimate business, not as a hobby, then he should be using Schedule C on the tax return to declare the business income. He can use the same schedule to deduct expenses associated with the business. At first glance -- and this is ONLY at first glance -- it looks like this is, indeed a business. In that case expenses that exceed income create a net operating loss that can be carried forward to later years. If the IRS determines this is a hobby, however, then expenses beyond income are not deductible. Feel free to contact me off-list with more questions. My full-time job is tax accountant, so I'm more than willing and able to help (to a degree -- I do have to earn my living, too!). Dave Liesse, EA Skingco Services, LLC On 1/6/2015 07:51, Kizzie Newman via wrote: > A friend is in transition from one career to genealogical/historical > research. This is the first year his business has shown a profit, a > considerable profit. One of his colleagues informed him that his work for > clients at the North Carolina State Archives and Library is not income tax > deductible. > > Once again, I turn to the folks on this list to answer a question for a > friend. Is client-based Archival research income tax deductible? > > Thank you for your time and help. > > Kizzie > > ------------------------------- > To unsubscribe from the list, please send an email to [email protected] with the word 'unsubscribe' without the quotes in the subject and the body of the message >