Business Loss Carryforward

[PaulaLettice]

I have a very small home based business with a store on eBay -- not about making a lot of money but it keeps me occupied.  I have taken a loss for several years after selling fees and I'm not concerned.  However, this year, Turbotax included prior year loss(es) that then added up to around $17K ... I don't want to take this big of a loss on my 2020 return ... how do I just show the 2020 position?  I would prefer a phone call back please.

Thanks, Paula [removed]

[phone number removed]

[Mike9241]

there's a question of whether your operating a business or have a hobby.  reporting for a hobby is completely different than the reporting for a business. 

here's a link that discusses hobbies and the factors the IRS uses

https://www.irs.gov/newsroom/hobby-or-business-irs-offers-tips-to-decide 

as a hobby, there would be no loss carryover.   not sure why there is a  "business loss carryover". they are NOL's that are not reported on schedule c.     is this an S-corp? as a rule you can't pick the amount of prior losses that you use one year and some more in another year.  it's all or none (subject to basis and at-risk rules).    however, we can't see your return so can't be sure exactly what's happening.

[PaulaLettice]

Mike -- It's a hobby ... and doesn't make any money after expenses such as eBay selling fees and postage.  I've reported it on my tax return for several years ... now I would just like to not include as it is, as you hinted, a hobby.  Any idea how I do this?  

Are you on the TurboTax system ... can I grant access to my return?

I'm ready to send in my return and this may be a hold-up.  Thanks, Paula

[ThomasM125]

Unfortunately, the deduction of hobby expenses has been eliminated by the Tax Cuts and Jobs Act of 2018 up until tax year 2025. So, if you are operating a hobby, you should report the income but you will get no deduction for the related expenses.

The income should not be reported as self-employment income, but rather as Other Income. 

So, you should delete the business you set up for your hobby and that may prevent the loss carryover from showing on your tax return.

You should enter the hobby income by using the following menu tabs in TurboTax:

1. Income and expenses
2. Less common income
3. Miscellaneous Income, 1099-A, 1099-C
4. Hobby income and expenses