Can I deduct my Web site expenses as costs of producing income under Internal Revenue Code Section 212?
A. Because the facts detailed above demonstrate that such Web sites are not purchased with the realistic intent to produce income (i.e., purchased solely for tax purposes), the associate costs are not deductible under the Internal Revenue Code. In any event, the amounts paid could not be defended as “ordinary, necessary, or reasonable” expenditures, as is required by statute for the deduction of an individual’s income production expenses. Q. If I received a Form 1099 for any income that was attributed to me from purchases made by visitors to the Web site, must I report it on my amended return? A. Because the Internal Revenue Service treats the virtual mall Web site “business” as a sham (i.e., as an activity conducted for tax benefit purposes only), this income is considered to be a nullity and should not be reported on your corrected return. Q. What can I do to get my money back? A. Your ability to obtain any money you paid with respect to the promotion is between you and the person or
Related Questions
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- Is the Section 179 expense limit based on the Internal Revenue Code as of Jan. 1, 2007 or the most recent version?
- Can I deduct my Web site expenses as costs of producing income under Internal Revenue Code Section 212?
