The person at the IRS didn't explain it so that you could understand, or she wasn't answering your question correctly. You actually have about a 50 - 50 chance of them getting it right, sad but true.
If you are hand writing your return attach a sheet itemizing all your expenses (food, mileage, entry fees, vet fees, training classes, leashes, supplements, etc etc) and attach. If you have software, it should print out for you. Make out the list and walk away from it till the next morning, I bet you will think of something you forgot overnight. Just put the RE taxes and mortgage on the appropriate lines on the A, you will get a larger deduction that way. You definitely DO NOT deduct it from your expenses.
Here is what the IRS lady said, the maximum hobby deductions minus real estate taxes & mortgage. Not that I deduct them from Hobby expenses. She said that is how I figure the maxium Hobby deductions.
But put the real eseate taxes & mortgage on the appropriate lines to take off full amount.
Here is the Publication 535 she got her info from:
Not-for-Profit Activities--- page 5
Limit on Deductions---- 3 catagories
I am so confused. I thought I had it figured out, but not now
