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Tax Question: Do you need to make $ before writing off costs?

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Tax Question: Do you need to make $ before writing off costs?

Old 02-07-08, 11:03 AM
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Tax Question: Do you need to make $ before writing off costs?

To make a long story short, I'm putting together a book of short stories and I'm paying contributors once their work is done. However, I won't see any income from the book until I can sell it.

So let's say that I spent $2000 in 2007 on this venture. Do I put that $2000 as costs of doing business in 2007 even though I haven't made any money back yet? Or do I need to wait until I actually make money before I can write that off?

(I have not incorporated myself or made a business for these costs, so I'm not sure if that effects an answer to my questions.)
Old 02-07-08, 11:22 AM
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i believe you only have to show a profit in your third year before your business is downgraded to a hobby.
Old 02-07-08, 11:52 AM
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So I'd need to put that debt in the 2007 taxes.

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