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QUESTION DETAIL
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Would a single member LLC reporting with a Schedule C be subject to the same hobby loss rules as a sole proprietorship? The LLC has reported losses for three straight years.
ANSWER
The BIDaWIZ Team's Answer:
Yes, the hobby loss rules would still apply to a single member LLC. Specifically, losses incurred by individuals, partnerships and S corporations in connection with a hobby are generally deductible only to the extent of the income produced by the hobby.
References: IRS Publication 535 and IRC Section 183(a)
State: New York
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