Interesting article in todays paper re 'hobby income'

[peterjohnson64]

Sorry Trueblue, but that is definitely not the case. However, if you were to consistently make more than 5 grand per year then you may be in trouble as in the greyhound better previously mentioned. He had to pay 5 years worth of taxes. as I said, if you sold your clutch of GTP's for $100k then that is OK so long as it is still a hobby. The ATO allows this because as soon as they say you are a business then every other person who loses money in their hobbies under similar circumstances can also say they are a business and there are a lot more of them than those making money.

 

[Magpie]

The ATO allows this because as soon as they say you are a business then every other person who loses money in their hobbies under similar circumstances can also say they are a business and there are a lot more of them than those making money.

True... I guess they'd have to allow every backyard bird breeder, rabbit breeder, rat breeder and choock breeder to claim if they started calling everyone who makes a profit a business.
Would I be correct in saying that essentially for it to be a hobby you have to be in it for the interest, not to make money and it has to not be a full time job cleaning and looking after the animals? you can make money as long as the ATO has no reason to belive that is why you do it, eg borrowing money to buy breeding animals.

 

[peterjohnson64]

Probably the main determinant is intent. If you go in it to make money then it's a business. But only you really know your own intent. You will tell the the courts that your intent was to make a profit only if you make losses and vice versa. This whole issue only centres around people telling porkies. So now we have a huge set of legislation and court rulings centred around trying to dertemine what business looks like and what a hobby looks like. I you know in your own mind that you are not doing it for the money then your actions should sufficiently reflect that. And vice versa. That said, if you are doing it for the money (and it can be for the love of it as well) then you had better decide what avenues you are going to take from a financial point of view.

 

[nervous]

this topic is confusing the hell out of me.

so you are saying that i can breed reptiles and make as much money as i wont out of them and i dont need to pay tax cause i have a full time job and reptile breeding is just a hobby?
is this what your saying cause pardon the ignorance or what ever its called
im just as confused as anything ..

cheers
ben......

 

[chameleon]

in queensland, a business cannot sell any snake save the childreni species,so
we are all fine here (with snakes )

 

[Splitmore]

in queensland, a business cannot sell any snake save the childreni species,so
we are all fine here (with snakes )

Thats the same here in NSW, but like Peter pointed out before all govt. departments don't operate the same. Meaning that just because parks and wildlife don't see you as a business that doesn't mean the tax department won't see you operating as one.
From memory one of the charges against Bob Buckley when he had his original greens seized was that he hadn't declared the proceeds from sales of babies as income. If that was the case then it would really throw a spanner in the works of the whole arguement.

 

[peterjohnson64]

Absolutely correct Splitty. Prostitution was illegal for years but it was still down as an occupation listing on tax returns. And Ben, yes it is very confusing. You can't make your own decision form the info in this thread. But the fact you have a full time job is irrelevant, its only how you treat your reptile hobby that matters. I have already been approached by a member for some advice. I intend getting a private ruling from the tax office. That will help clear things up for the hobbyists who also happen to make good money - cause there ain't many of 'em.

 

[peterjohnson64]

sorry to bring this topis up again but I was speaking to a keeper recently who has twice been told by the tax office that he is a hobby, not a business. He was doing OK in sales but probably not making any decent money. He has none of the so called "badges of business". I.e. he doesn't have a business name, sells his herps mainly to friends and advertises what he has excess, doesn't run a separate bank account, doesn't keep books of account. I still haven't got my guinea pig for the ruling but following these discussions a lot of you (but certainly not all) can breathe a sigh of relief.

I think they see more negatives in ever determining that we are businesses instead of hobbyists.

 

[Moreliaman]

jeez..........olive.....how long you been dealing ?? you deal with the heavy stuff or just starting out on the light stuff, piriton, asprin, viagra etc etc :wink: :lol:

 

[peterjohnson64]

Hey Mark, as well as driving, tax is another thing you will discover in Australi. We aren't as bad as the Yanks (they lodge federal & statre tax returns) but over here if you earn more than $6,000 in a year you have to lodge a tax return (with some exceptions for pensioners and th elike). So you have something else to contend with now.

 

[wokka]

i have just come back from holidays and looked at aps to catch up on whats happened. i have been in business for a long time and was going to retire, play a bit of golf and so on.After reading Petes thread i thought maybe i should make a business of playing golf. Am i right that if i borrow the money to buy the golf clubs, lessons etc . my golfing should be considered a bussiness? Maybe i'd need to file all the data (score cads and the like) and then of course register a name and advertise for sponsors.or year, and every good golfer seems to travel theworld improving their stroke. Is there anything else i need to do?

 

[Allan]

Peter, what about if you advertise excess animal on a private website that is up and running all year around. I know it's probably another grey area, but I've found all your info very interesting.

 

[Allan]

Sorry, should be "animals"

 

[salebrosus]

Full time pension? Does that mean i can sit on the doll and breed snakes and not have to pay any tax? Damn what the hell am i doing at uni then?????

Simone.

 

[pugsly]

Remember guys its very complicated, and the court takes intent nto account, so yes you can be on a pension and sell excess snakes, but if the court deems that your are intended to do this as a business than you will be taxed as one.

If your are just advertising excess animals than no it is not a business and you will not be taxed on the income. It depends how you go about it, if you advertise as a business you are more likely to be taxed as one i.e Steve's Snakes, rather than 'Excess Animals'.

 

[peterjohnson64]

Exactly Pugs! And Wokka, yes you can make golfing a business, I actually have 2 professional golfers as clients. They are playing tournaments all over the place. But they don't make any money so they don't pay any tax. And they have no other income either so there is no tax benefit in their losses from the business. Just accounting costs. But as a professional sportsman you also can use a thing called "averaging". This means that you don't get stung so much if you earn $100k this year after earning nothing for the past 4 years. These guys are genuine professionals and hope to be earning heaps in the future so they are just doing it right from the start.

But this thread started by the guy who made $10 million and didn't have to pay tax because it was a hobby. Wouldn't he have been an idiot if he had been claiming poker as a profession because he lost a few hundred dollars each year from it and wanted a tax deduction.

And I think that 90% of people who post in here would still be considered as hobbyists anyway.