"C J Campbell" wrote:
...
I am not sure what you are claiming is a fabrication. Are you
saying that
Amazon.com and real estate tax shelters would not fail the 3 out of
5 test?
....

Pure summary, assuming all this is inappropriate for the NG. Hobby
loss rules do not apply to "C" corporations like Amazon or the
airlines. "Equal protection" arguments don't apply to noncriminal tax
issues, as Congress can allow a tax benefit, or deny a benefit, for
makers of widgets, but not gadgets. It can creep into tax-exempt org
issues, though. The practical aspects of real-life hobby loss issues
tend to render the 3/5 test moot. Recent developments in the shift of
burden of proof in Tax Court and reimbursement of representational
fees renders even the "rebuttable presumption" rather moot. IOW, it's
all a pure factual question, whether the losing, alleged business
passes the basic sniff test for hobbies.

Unless you are an IRS auditor, of course....

Formerly, but mere Auditor hell. :-) Many yrs in technical,
managerial, and training matters; civil and criminal litigation.

Reg,
Fred F.