[Mark T. DeNucci, Sr.]

Originally Posted by Whistles & Stripes

Per my previous post, it is actually 3 out of 5 years, not 2. Maybe it was 2 way back in 1996. Who knows.

I also don't like your stamp collecting example, as items such as stamps, coins, etc. are subject to capital gains rules and are reported in Schedule D, not E.

I also take issue with your statement that "The rules state that your business is to have a profit 2 out of every 5 years." The IRS can't tell you how often you HAVE To have a profit. All they can tell you is how often you have to have a profit IN ORDER TO BE ALLOWED TO DEDUCT YOUR LOSSES. Maybe I'm splitting hairs here and that is what you meant. And again I point out, the current rule is 3 out of 5 years.

When I said 2 out of 5 years I meant 3 out of 5 years. I am getting senile in my old age and probably was thinking of a loss 2 years out of every 5 years. And the stamp collector example was the example the IRS agent with whom I was officiating gave, not me.

MTD, Sr.