Storey v. Commissioner
United States Tax Court
T.C. Memo. 2012-115 (2012)
Relevant factsFree
Storey (plaintiff), a successful full-time lawyer, produced a documentary film in her spare time, consulting film experts, forming a business entity with its own bank account, credit card, bookkeeper, and accountant, writing a business plan, and marketing the film to festivals, where it won critical acclaim and awards despite generating no profit yet. The IRS (defendant) disallowed her deduction of filmmaking expenses, arguing she wasn't engaged in filmmaking for profit, and Storey appealed.
IssueFree
Whether courts determine if a person may deduct expenses associated with an activity by assessing whether the person is engaged in the activity for profit.