Tax reform and Schedule C businesses
Join Date: Jan 2007
Posts: 5,806
Now that tax reform is going to happen (if the kids in Congress and the White House can ever stop fighting) this really should be addressed.
As I understand the rules, my brother could have two Schedule C businesses, for example, landscaping and a restaurant.
I play poker full-time, and to keep that status as a Professional Poker Player (the Department of Labor job title) poker has to consume more than 50% of my work time or provide more than 50% of my income. Why? If my brother had two or more Schedule C businesses, the IRS would not tell him how to divide his work hours or his profits.
I have had some business opportunites offered to me as a second job and I didn't even consider saying yes, not only because I love poker, but also because if I made a good second income and had a huge poker downswing, poker might not generate 50% of my income in a calendar year, which could cost me all of my poker business deductions, among other things.
A restaurant owner and a poker player could both have their incomes go up and down quite a bit from year to year. There shouldn't be any difference.
Why should poker be treated differently than any other Schedule C business?
It wouldn't be a complicated fix, at least, it shouldn't be. A few sentences in the tax code, stating that all Schedule C business owners are equally free to own more than one business, should do it.