It’s something you should discuss with your tax preparation professional, if you use one.

I’d love to hear some thoughts on this, because I can’t seem to find anything about it!

1. To determine if your blogging is a hobby or business I suggest you check out the following IRS article on the topic – http://www.irs.gov/newsroom/article/0,,id=169490,00.html

You will see that it provides questions/guidelines on how you can determine how your blogging should be handled with regard to your taxes.

2. A book received for review may or may not be business income depending on the relationship you have with the source of the book. If it is income, then expenses associated with sending it to a giveaway winner would likely be a legitimate business expense. This is definitely a question for your tax professional since it would be their credentials on the line if you are audited. If you do your own taxes, you should read IRS Publication 535, Business Expenses.

3. Charitable deductions are only permitted for qualified organizations. Winners of giveaways are not likely to be qualified charitable organizations. You can gift property to anyone. And in doing so, if the gift is substantial enough you should look in to that topic. However, giving a gift and making a qualified charitable contribution are not the same.

4. Converting personal property to business property – If you wish to take something personal and make it into business property you’ll need to read up on that topic. It’s not as easy as it seems because there is a formula to determine the cost basis and property converted from personal use to business use does NOT qualify for the first-year expensing deduction (Section 179).

1. if I have not seriously tried to make money on my blog, and income is less then $600, then I can keep is as a hobby (blog only 2 yrs old), right?

if so, say books received for review would be considered income? But, then mailing costs for them (sending to giveaway winners) would be costs incured/deductions?

2. in relations to that scenario- if i read the book and then giveaway to a reader via giveaway, is the book considered a charitable deduction? Am confused as to whether you can ‘donate’ books to yourself, aka your blog. What about books from my personal bookshelf (that I bought)- can they be donated as well to myself/blog?

Thanks for the help!

Thanks for visiting and commenting! You’ll be that ‘Big Blogger’ we all say “I knew when …”.

Thank you for your kind comment and I hope one day soon you’ll need to print this out and take it to your tax preparer because you’re rollin’ in dough!

Wishing your much success on your journey to making someday come as soon as possible.

~ Sara

It would depend on how you structure the promotion and who the actual sponsor of the promotion is.

For giveaways, you can check out my post about them here: http://www.savingforsomeday.com/blog-law-is-your-giveaway-legal/

If you are the sponsor of the promotion then you own what you’re giving away. If the establishment is the sponsor then they’re giving them away. So, it would depend on how you do your promotion.

If you own the property then you got it somehow – (1) you purchased it or (2) it was given to you. If it was given to you then you have to determine if it was a gift or compensation. Chances are a business is giving you things a compensation.

The rule here would be similar to that of donations – if it’s income to you or you bought it with your own money and you give the product/service away then you can possibly claim it as a business expense (you’d have to know the rules related to legitimate business expenses).

If the item was a gift and you’re giving it away, the IRS may not see how it became a legitimate business expense. You’d have to discuss this with your tax professional.

Thank you for visiting and commenting. Appreciate your support!

Thanks for your comment and I think your comment is well worded.

Glad you find it helpful and feel that it’s a good starting point to have the discussions with your tax professional.