• July 2018
    M T W T F S S
    « Jun    
     1
    2345678
    9101112131415
    16171819202122
    23242526272829
    3031  

What are the implications of creating an LLC for a blog?

The rule you’re speaking of is the IRS hobby rule. If a limited liability company (LLC) has not turned a profit in at least three of the prior five years, the IRS will categorize your business as a hobby. If the IRS classifies your blog as a hobby it would prevent you from claiming a loss related to the LLC. The IRS also lists factors on its website to help people “determine whether your activity is an activity engaged in for profit or a hobby:

  • Does the time and effort put into the activity indicate an intention to make a profit?
  • Do you depend on income from the activity?
  • If there are losses, are they due to circumstances beyond your control or did they occur in the start-up phase of the business?
  • Have you changed methods of operation to improve profitability?
  • Do you have the knowledge needed to carry on the activity as a successful business?
  • Have you made a profit in similar activities in the past?
  • Does the activity make a profit in some years?
  • Do you expect to make a profit in the future from the appreciation of assets used in the activity?

Hope this helped! At LawTrades, we’ve have helped a bunch of bloggers deal with their legal concerns by offering affordable legal representation from top-notch attorneys. Stop by for a free consultation or a free price quote.

Sending
User Review
0 (0 votes)

Legal is hard. Let’s tackle it together.

Speak to one of our Legal Pros and discover how we can help.

Let's Talk

Comment

There is no comment on this post. Be the first one.

Leave a comment