Form 5213

Form 5213

A form that an individual, trust, partnership, or corporation files with the IRS to ask the IRS to postpone determination of whether the filer engages in an activity to earn a profit. Most activities are assumed to be for profit if a profit results. However, if there is no profit, the IRS may, under some circumstances, determine that the activity is not for profit, which would limit the tax deductions for which the filer is eligible.
References in periodicals archive ?
To make a valid election, the taxpayer must file Form 5213, Election to Postpone Determination as to Whether the Presumption Applies That an Activity Is Engaged in for Profit, and execute a waiver of the statute of limitation.
Practice tip: While filing Form 5213 allows a taxpayer additional time to establish the existence of a trade or business activity, it also alerts the IRS to a possible hobby loss issue.
(The determination of the safe-harbor profit presumption is delayed until the end of the fourth year following the first year of the activity (i.e., year 5) and three of those five years produced net profit.) Observation: The Tax Court previously held that Form 5213 not only extends the period for assessing deficiencies associated with an activity, but it also applies to a taxpayer's right to make a claim for an overpayment.
Form 5213. Election to Postpone Determination as to Whether the Presumption Applies That an Activity Is Engaged in for Profit, can be filed in cases where a taxpayer is concerned about not meeting the safe harbor provision and thinks the IRS might consider an activity a hobby.
This requires filing Form 5213, Election to Postpone Determination as to Whether the Presumption that an Activity is Engaged in for Profit Applies.
It is possible to combine a special presumption with the general presumption and to shift the burden of proof for the years 1987 and 1988 to the Service by filing Form 5213, Election To Postpone Determination as To Whether the Presumption That an Activity Is Engaged in for Profit Applies.
C filed a timely 1983 return and included Form 5213 (which postpones determination of whether a Sec.
C made the required election by including Form 5213 with his timely filed 1983 return.