A couple of things to note:
- The hobby loss rules only allow deductions to the extent of income (can't create a loss)
- You can certainly contribute equipment to your LLC, but the law requires carry over basis not FMV.
- Keep in mind that your LLC is probably a single member LLC which is disregarded for federal income tax purposes. So not sure what you are attempting to accomplish by setting up a single member LLC for a hobby.
- You kind of get whip sawed under the hobby loss rules; income reported as other income and expenses are reported on Sch A itemized deductions subject to the 2% of AGI limitation in addition to only being able to claim expenses to the extent of income
Not what you were expecting, but those are the limitations.
*A reminder that posts in a forum such as this do not constitute tax advice.
Also keep in mind the date of replies, as tax law changes.
