The Tax Court agreed with the Internal Revenue Service in disallowing an attorney’s attempt to write off her family’s travel costs as an expense for some books she wrote.

Lisa Fisher, a practicing attorney in New York, was asked to travel to the Czech Republic for an extended period at the request of a client. Since her husband, also a practicing attorney, could not take time off to tend to their three children, all under nine years old, she took them with her on the trip.

Concerned about entertaining the children on the long car rides she anticipated taking during the trip, she came up with the idea of writing a book about the country that would be informative and hold the children’s interest, or, as she testified, “keep them busy” while traveling by car. She later decided to develop a series of travel books for children.

During 2006-2008 Fisher created some “prototype” books, some of which she sold by “word of mouth” in response to specific requests from friends and clients who planned to travel with their children. On her Schedule C for the years in question, Fisher reported losses of $21,897, $31,971, and $20,157 generated, in part, by “other expenses” for lodging, airfare, and entrance fees incurred in travelling with the children.

The IRS disallowed the all but $479 of the expenses, which allowed Fisher to reduce her income from the activity to zero but not below. In a summary opinion (Fisher v Commissioner, T.C. Summary Opinion 2016-10), the Tax Court upheld the IRS’s determination without applying the Hobby Loss rules of Code section 183, which require an actual profit objective. Instead, the court said, to be deductible the business must have actually commenced. Assuming without finding that Fisher did conduct her book-writing activity with a profit motive, the business itself had not begun.

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