Writing off gear?

Carlo Coggi writes ...

Two months ago I sold my Canon 10D and bought a 30D and some related
camera gear. If my photos and text are accepted for publication, can I
then form a sole proprietorship or corporation and *retroactively*
write-off the cost of my gear and trip?

Assuming you're in the US you have two options once you rake in some
bucks thru your photography ... one option is to declare the income as
'hobby income' and report it on (I think) line 21 of your 1040, then
you can declare expenses *up to that amount* (but not over) if you
itemize deductions. If you do not itemize deductions then you have to
report as income the full amount. Google on 'hobby income photography'
or similar for specifics. There's quite a bit of useful info on this
on the web, including IRS publications.

The other option is to declare a "business" for your photography, in
which case you file a separate form listing all your income, expenses,
depreciations etc. You can have a loss here and use it to off-set
other earned income, BUT (gigantic but) you need to be able to
demonstrate you are running this like a business and trying to make a
profit, not using it as a tax write-off. If doing this option you
should consult a tax attorney since using photography as a tax
write-off is something the IRS lads look for and it could easily
trigger an audit if you have several years of low income and high
expenses leading to losses applied to other earned income.

... write-off the cost of my gear and trip?

In both of these scenarios you can write off the costs of the trip if
you sold an article about it (if hobby income, can only write off
expenses up to the amount of income) but in neither of these scenarios
could you write off any gear you sold earlier before you took the trip
or decided you were a "business".

If you make a lot from selling a story about the trip it's worth
consulting an accountant but if it's under a few thousand dollars it's
simpler to report it as hobby income unless you'll be doing this often.

Bill (not a tax attorney so consult one before blindly following this
advice, but I've researched this issue before ...)