I will probably try to track down some professional tax assistance, but the forums have been so helpful in the past I figure Id post here for now.
I started a hobby earlier in the year, and I am planning on turning it into a business in the next year or so, but for the entire year of 2006 I will not be turning a profit or even selling anything as I will be growing/developing.
Let's say I've spent 20-30k on this hobby/business venture in supplies, consumables, expenses, etc, including tools/products that will be used to produce more in the coming years (but no plans on selling these base products)
1) Can I deduct any or all of the 20-30k on my personal tax return, or am I limited somehow?
2) Would this be a hobby deduction, or a business deduction, or what would be the best way?
3) Ive permanently turned my garage and 2 rooms in my house into being used SOLELY for this venture, is it possible to depreciate that?
4) I have a car I use about 50% personal, and 50% for this hobby/business, another possible deduction?
Honestly I will probably go to a CPA or something similar early next year, but I was hoping for a preliminary assistance if anyone had time and knowledge.
I started a hobby earlier in the year, and I am planning on turning it into a business in the next year or so, but for the entire year of 2006 I will not be turning a profit or even selling anything as I will be growing/developing.
Let's say I've spent 20-30k on this hobby/business venture in supplies, consumables, expenses, etc, including tools/products that will be used to produce more in the coming years (but no plans on selling these base products)
1) Can I deduct any or all of the 20-30k on my personal tax return, or am I limited somehow?
2) Would this be a hobby deduction, or a business deduction, or what would be the best way?
3) Ive permanently turned my garage and 2 rooms in my house into being used SOLELY for this venture, is it possible to depreciate that?
4) I have a car I use about 50% personal, and 50% for this hobby/business, another possible deduction?
Honestly I will probably go to a CPA or something similar early next year, but I was hoping for a preliminary assistance if anyone had time and knowledge.
