Self-Study Course: Hobby vs. For-Profit Activity - University of Illinois Tax School
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Scroll down for course details! Self-Study Course: Hobby vs. For-Profit Activity

When are business activities considered a hobby and when are they presumed to be conducted for-profit? This self-study course can help you better advise clients about the important distinction between business activities. Gain answers to these key questions:

  1. What criteria does the IRS use in an audit to distinguish between a hobby activity and one carried on for-profit?
  2. How can you help your clients understand the 9-factor test and how these factors are applied by the IRS?
  3. Which types of business activities typically receive high level IRS scrutiny related to hobby versus for-profit designation?
  4. How do you advise clients to proceed when you're not certain if the new activity is a hobby or an activity engaged in for profit?
  5. What is the order of expense deductions allowed for hobby activities?
  6. How should your clients handle activities that shift from for-profit to hobby and back to for-profit over the span of a few years?
  7. Which components of a business plan are important for a client to document?
  8. What are your due diligence obligations related to accurately classifying your clients' business activities as a hobby versus a for-profit activity?

(The date in the dropdown list above can be ignored.)

Self-study courses involve completing a pretest, watching a video, answering quiz questions inserted throughout the video, and successfully passing an exam with a score of 70% or better. Each course includes a set of materials that accompany the course presentation. Each course is reviewed annually to ensure the information is up-to-date with current tax law.

This course offers 2.0 CPE credits and qualifies for IRS credit and is NASBA QAS-approved for CPA credit in all states.

This course performs best utilizing a desktop or laptop computer.

Cost: $50.00. To register, add the self-study course to your cart by selecting the date in the dropdown menu in the above box. The course expires 1 year after your purchase. Your exam must be completed within 1 year of your purchase date.

Upon purchase, the transaction receipt that is provided via email will contain instructions to access the course. NOTE: The person purchasing this self-study course must be the same person taking the course and completing the exam.

For questions regarding refunds, registration policies, and resolving concerns, please see our Policies and Procedures page.

Tom O'Saben photo Tom O'Saben has been an instructor for the Tax School since 2009. During that time, he has also been a presenter with the National Association of Tax Professionals, where he served as a Training Specialist developing curriculum, writing textbooks, and instructing at educational seminars. Tom's practice, established in 1991, provides tax services for approximately 1,000 clients. Tom earned his bachelor's degree from Southern Illinois University Edwardsville. He is an enrolled agent (EA).

Learning Objectives: By taking this self-study course, learners will be able to:

  1. Identify information that the IRS uses to determine whether an activity is engaged in for profit.
  2. Analyze a client's situation to determine if an activity is a hobby or a for-profit activity.
  3. Identify types of deductions permitted for a hobby activity, where they are deducted, and in which order they are taken.
  4. Determine when filing Form 5213 is appropriate for a client.
  5. Recognize components included in a typical business plan.

CPE Credits (qualifies for IRS): 2.0. Final exam must be passed with a score of 70% or better.

Delivery Method: QAS self-study (online self-study)

Program Level: Overview

Field of Study: Taxes

Prerequisite(s): Professional experience preparing and amending federal tax returns and a basic understanding of tax rules for Schedule C businesses.

Materials: Upon purchase, the transaction receipt that is provided via email will contain instructions to access the course materials.

Advance Preparation: None

Please see the CPE FAQ for more information.

Last updated 8/4/2017 12:58:45 PM