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Essay text:
Crane’s playwriting an activity entered into for profit?
• If it was, did he meet his burden in substantiating each expense and its relationship to his playwriting activities as required under the Code?
• Does he owe an accuracy-related penalty?
Mr. Crane must show:
Mr. Crane must establish that he engaged in the activity with the primary purpose and intent of making a profit. His expectation of profit need not be a reasonable one but he must have a bona fide expectation of realizing a profit.
Assumptions we can make to enrich the case:
Mr. Crane conducted his playwriting and research in a systematic manner and spent a substantial amount of time and money on his projects...
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