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Matt Foley · 07-13-2008, 05:03 AM

Ok, I'm just spitballing here. Here me out. I have a theory.

I have recently set up a blog where I review new beers I try, new books about beer, places I drink beer etc. Lets say I throw up a few google ads, Amazon Ads, maybe I get lucky down the road and generate traffic warranting charging for ad space. Maybe I start selling some Zazzle or Cafe Press gear. In any event, attempting to generate profit.

What brings people to the site are my reviews. In order to review, I must drink beer (and I'm willing to do it). Isn't the cost of that beer a reasonable and necessary business expense? Can't I deduct it? If I can avoid it as a "hobby loss" I may even generate a loss that would lower my tax burden from other income producing activity. All from drinking beer. That would be cool.

Ok, perhaps this should have been posted under drunken ramblings. Lets here from the accountants. Feel free to post your circular 230 disclosures.

**Sea** · 07-13-2008, 05:04 AM

Not an accountant, but it seems perfectly reasonable to me.

brewt00l · 07-13-2008, 11:52 AM

Let's just look at this from a very broad perspective...

1. You're going into this with the expectation of not turning a profit..even if you slip under the radar a couple times, you can't sustain/support your profit motive for long. Figure out how to make drinking beer pay you money first and worry about your taxes second.

2. A $10 loss prb is not going to equal a $10 reduction on your taxes because of how your tax liability is calculated. Prepare your taxes and see how much bottom line savings you get for each $100 added to your deductions...then, consider if the risk and penalties are worth such little yield.

sonetlumiere85 · 04-09-2009, 07:29 PM

I would have to assume that you'd be qualifying this as a miscellaneous deduction? In which case the limit is $2,000 I believe. Also I'm not sure that something which carries a "sin tax" in many states is going to work that well for you. If you could justify its use as a promotional item, maybe.

McKBrew · 04-09-2009, 07:33 PM

I don't know that you could deduct the beer as a legitimate business expense. If you do start to turn a profit and treat it as a business, anything related to that, like a new computer, office supplies, clothing, internet access, etc... should be tax deductable.

giligson · 04-09-2009, 07:37 PM

Quote:

Originally Posted by brewt00l

Let's just look at this from a very broad perspective...

1. You're going into this with the expectation of not turning a profit..even if you slip under the radar a couple times, you can't sustain/support your profit motive for long. Figure out how to make drinking beer pay you money first and worry about your taxes second.

2. A $10 loss prb is not going to equal a $10 reduction on your taxes because of how your tax liability is calculated. Prepare your taxes and see how much bottom line savings you get for each $100 added to your deductions...then, consider if the risk and penalties are worth such little yield.

He's right, the deduction is going to be depending on how much you are earning etc - If you are making that much money on your model then you probably aren't even going to be worried about deducting your drinkin' beers. You want to deduct beer as a business expense? Then start a liquor store or bar.

**olllllo** · 04-09-2009, 07:37 PM

Matt, it's this type of thinking that keeps you living- in a van- down by the river.

davefleck · 04-09-2009, 07:42 PM

talk to your CPA but i think 3 of the first 5 years you need to show some sort of profit otherwise the IRS will consider it a hobby.

You also won't be able to write off a case if you're reviewing A beer. Unless you're using the opnions of a lot of people.

Really, it sounds like a PITA unless you really WANT to create a review site.
In which case you will have much larger write offs like getting your certification as a judge. You'll want some proof you are a 'expert' other then your bud drinking cousin's thoughts.

david_42 · 04-09-2009, 07:44 PM

You would have an extremely difficult time convincing an auditor that this was anything other than a hobby. Even if you set up a company, the expectation is that you turn a profit most years and web ads aren't a business model. Unless you can get a book published, lots of luck.

Beerzoid · 04-09-2009, 08:08 PM

I don't have my CPA yet, but like others have mentioned it would be most likely counted as a hobby.