Missionary

[Acownt4it]

I have a new client that is was a missionary last year. The entire family went to Mexico doing missionary work from July of 2005 through April 2006. They received income in the form of 1099-Misc for this work.

Do I put this income on Schedule C and deduct the expenses for this work on the Sched. C? or is this income "Other Income" not subject to self employment taxes and the expenses are deducted on Schedule A?

Any insite on this is would be appreciated, I have not had anything like this before.

[jainen]

Guidelines

Guidelines for determining if an activity is not for profit are often labeled hobby loss rules in various references. Some of the relevant issues for a missionary are the extent of specialized knowledge and training, the time and effort expended, and whether the taxpayer had other more significant means of support.

[Acownt4it]

reference materials

Do you know a website I can research this further?
The only other means of income they had is from the husbands police pension fund of $12000 per year.
I wouldn't consider this a hobby for them, it is more a way of life/calling. Everything they do centers around their "ministry".

[jainen]

What's to research?

What's to research? This is his career, so put it on Schedule C or Form 1065.

Try this web site-- >>http://www.irs.gov/pub/irs-pdf/p535.pdf<<

Page 5 describes not-for-profit, but you need the rest of the book more.

[Unregistered]

Revenue Rule 62-113 may provide some insight. Can be downloaded from: http://www.taxlinks.com/rulings/find.../topbanner.htm