profit motive

profit motive

the objective of a FIRM to ensure that revenue exceeds costs. The term is usually associated with the FIRM OBJECTIVE of PROFIT MAXIMIZATION, but a profit motive would still exist where only satisfactory profits were aimed for. See also PROFIT, SATISFICING THEORY.
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Thus, although the Chamberlains had no profit motive, thereby justifying the enhanced interest assessment, their reliance on an expert allowed them to avoid the negligence penalty.
Expert's advice eliminates negligence penalty
Although the idea of a hobby is generally associated with fun and recreation, the element of personal pleasure derived from engaging in a hobby is just one of the factors used to determine the existence of a profit motive.
Hobby or hard work? Don't let the IRS decide
Individuals engaged in certain endeavors cannot deduct their losses if the endeavor is "not engaged in for profit." The presumption of a profit motive can be achieved if the activity shows a profit in three years out of five (two years out of seven for horses).
Deductibility of expenses under the business/hobby rules
Some have suggested that making the partnership a party to a corporate buy-sell agreement may give the partnership a sufficient objective to carry on business for joint profit motive. In any event, this aspect of the transfer strategy deserves special attention.
Transfer-for-value rule
165(c) contains a trade or business or profit motive limitation aimed primarily at individual taxpayers.
Landlord's ability to write off discarded tenant improvements challenged by IRS
DV Saini, Central Public Information Officer, Rohtak said there is no profit motive behind the initiative.
Packaged Ganga jal being sold at Haryana post office
The inability of a taxpayer to deduct even a portion of the hobby expenses while recognizing all the hobby income in adjusted gross income makes establishing a profit motive for a hobby activity even more desirable.
Avoiding the hobby loss trap after the TCJA
What is the place of a profit motive in the production of knowledge at public universities?
What's the Role of a Profit Motive in Research?
Points that the court found weighed against the taxpayer's claim of a profit motive included that although the taxpayer engaged the services of a bookkeeper and a CPA, he did not operate the business in a businesslike manner because he never reviewed the ranching activity's financial statements with either the bookkeeper or the CPA; he did not establish a formal written business plan; and, after five years of operating the ranch at a loss, the taxpayer never changed the operating structure of the ranching activity.
Profit motive key in hobby loss cases
If the IRS challenges the profit motive and a taxpayer fails to substantiate the profit motive, the taxpayer will lose all the deductions.
HOBBY GROSS INCOME AND EXPENSES AFTER THE TCJA: The Tax Cuts and Jobs Act of 2017 may have made the reporting of hobby gross income and expenses even more challenging for taxpayers and their tax preparers
But, despite evidence and experience to the contrary that a pure profit motive is unsustainable, many firms still operate in this manner.
Truth in Marketing: Reality or an Oxymoron?
While it is not prohibited or discouraged for a cooperative to generate income per se, the profit motive is only at the outer fringes of its goals.
CSR or SE: Which is the better business approach or model?

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