Brian C. Bernhardt
for Virginia Business
The May cover story of Virginia Business explores the growing horse industry in the commonwealth. As the industry has grown over the years, however, it has also attracted the attention of the IRS. As with all businesses, the IRS is not only concerned with whether owners of horse-related businesses are including all of their revenue on their tax returns, but also whether they are truthfully accounting for their expenses. The IRS is also concerned with a deeper, more theoretical issue — whether the horse-related activity is “really” a business or simply a hobby.This theoretical question has very practical consequences: If the horse-related activity is “only” a hobby, then you can only deduct expenses up to the amount of revenue received... -read more-