Meals and entertainment expense. Expenses attributable to business use of the home. Environmental clean-up costs. Rent paid to a lessor spouse. Losses Hobby losses.
Losses are deductible if they are attributable to a business.
An activity is presumed to be a business if there is net income or profit for 3 or more of the last 5years. For activities consisting of breeding, showing or raising horses, the presumption arises if there is a profit in any 2 out of the last 7 years. The IRS can rebut the presumption by carrying the burden of proof and establishing a lack of profit motive. If the presumption does not resolve the issue of whether a farm is being operated for pleasure or recreation and not as a commercial enterprise, a determination must be made as to whether the taxpayer was conducting the activity with the primary purpose and intention of realizing a profit. Casualty and theft losses.