A married pair ran several projects under a single LLC. They built houses on their big farm, made an app to help people stop using the internet too much, and even tried a quick mulching side job. After filing taxes for 2017‑2019, the IRS said their business expense claims were not allowed. The couple asked the Tax Court to review those decisions.

The court looked at each activity separately. It decided that most of the home‑building work was done for profit, so those costs could be deducted if the couple proved they were legitimate. The same was true for their app project, which aimed to generate revenue from users.

For the short‑lived mulching venture, the court was less certain. It found that this activity did not clearly show a profit motive, so those expenses were largely rejected.

Overall, the court let the couple keep most of their deductions for the profitable parts of their business. The ruling shows that the IRS will still scrutinize expenses, but it also acknowledges that small businesses can legitimately claim costs when they are truly aimed at making money.


# **Couple's Business Ventures Scrutinized by Tax Court**

A married couple operated multiple projects under a single LLC, including:

- **House Building** on their large farm
- **App Development** to help reduce internet usage
- **Mulching Side Job**

After filing taxes for **2017-2019**, the IRS disallowed many of their business expense claims. The couple appealed to the **Tax Court** for review.

## **Court's Decision**

The court examined each activity separately:

### **✅ Allowed Deductions**
- **Home-Building**: Mostly done for profit; expenses deductible if proven legitimate.
- **App Project**: Aimed at generating revenue; expenses allowed.

### **❌ Disallowed Deductions**
- **Mulching Venture**: Lacked clear profit motive; most expenses rejected.

### **Final Ruling**
The court upheld most deductions for the profitable parts of their business.

**Key Takeaway**: The IRS scrutinizes expenses, but small businesses can legitimately claim costs when they are genuinely profit-driven.



Couples Fight IRS Over Home and App Costs

Court's Decision

✅ Allowed Deductions

❌ Disallowed Deductions

Final Ruling

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