Tennis Umpire

[DTS]

I have a client who did professional tennis umpiring, nationwide and Grand Slam events for many years. This was a big portion of his income.

However, he did no tournaments last year and only two local events here in CA for 2005. Amount of income from this activity is rather minimal and no expenses to speak of, as in past years.

I feel like I could now categorize this as hobby income, not subject to SE. I would like to get your thoughts on this.

Thank you, Dennis

[Snaggletooth]

Don't think so

Dennis, I think the tracks have been laid for too many years for this to be considered a hobby, especially if the desire is to avoid self-employment tax. One of the criteria of hobby income is that it be outside the scope of conventional income. The "minimal" criteria has maybe been met, but the "out-of-scope" has not.

My opinion only. Would like to hear what others have to say...

[OldJack]

He showed up for a job, spent time doing the job, got paid something for the job, and thats called self-employment income. Hobby rules are for not allowing loss, not to reclassify self-employment income as other income.

[Bill Tubbs]

Hobby rules

Hobby rules are for not allowing loss, not to reclassify self-employment income as other income.

On that point I disagree. You can make a profit at something and still have it be a hobby. And, that activity may have once been a job or self-employment, but now is just a hobby. As the years go by, the facts surrounding the activity may change, so an activity may go from SE -> Hobby or Hobby -> SE. Take a look at http://www.irs.gov/businesses/small/...=99239,00.html

As far as this particular case, I don't have enough facts to render an opinion. Was he actively trying to get umpiring gigs around the country but just didn't fare well this year? Then I'd tend to still go SE. Or, did his health limit his travel and/or time working? If so, probably SE. Did client take a new job (perhaps because he didn't want to travel so much any more), and is he making a living off this new job? If so, he may be just continuing this umpiring in his local area as a hobby.

Facts and circumstances folks.

Bill

[DTS]

Reason for the post...

Thanks for the help. I will go to the website and check on this.

I posted this because of the very reason Snags stated. However, I agree with Bill, also. I need to call this client this afternoon on other matters and will get the particulars of this income and go from there.

It dawned on me last night that Brad wrote an article in EA Journal on this topic some time ago, so I'll reread this as well.

Thanks, Dennis

[Armando Beaujolais]

Thanks for the help. I will go to the website and check on this.

I posted this because of the very reason Snags stated. However, I agree with Bill, also. I need to call this client this afternoon on other matters and will get the particulars of this income and go from there.

It dawned on me last night that Brad wrote an article in EA Journal on this topic some time ago, so I'll reread this as well.

Thanks, Dennis

That was the NATP TaxProJournal, Fall 2005.

[OldJack]

On that point I disagree. You can make a profit at something and still have it be a hobby. And, that activity may have once been a job or self-employment, but now is just a hobby. As the years go by, the facts surrounding the activity may change, so an activity may go from SE -> Hobby or Hobby -> SE. Take a look at http://www.irs.gov/businesses/small/...=99239,00.html
Facts and circumstances folks.
Bill

The link you provide does not deal with the issue of SE tax but does point out the fact that the intent of this Judge is to make a profit as he knows he will be paid and probably little or no expenses. Therefore it is not a hobby and subject to SE tax.

It is generally accepted that people prefer to make a living doing something they like. A hobby is an activity for which you do not expect to make a profit. If you do not carry on your business or investment activity to make a profit, there is a limit on the deductions you can take.

[Snaggletooth]

Great Boxing Match

...as we have a ringside seat watching Old Jack and Bill go at it.

I agree with Bill. I think there is a connotation for "Hobby" when the activity is so casual and so far removed from his mainstream modus operandi, that an excess of revenue over expenses would not result in SE tax. I can't quote regulations, but there was a very extensive discussion on the old board when we were over there.

I don't think this applies in Dennis case, but I do think the phenomenon exists. Old Jack is from Missouri, so I guess we will have to "show him."

Sorry Jack, I can't. But there were regulations galore quoted back when that discussion was raging.

Regards guys, Ron J.