Game Show Pro

Can a steady, diligent effort to become a game show contestant be considered a business endeavor? Some care must be taken: the U.S. government does not want personal entertainment expenses to be tax-deductible. The Internal Revenue Service has criteria to distinguish between a hobby and a business. According to the IRS, here are the factors to consider as to whether an endeavor is a business, along with my commentary.

Whether an activity is a business depends on whether:

1. You carry on the activity in a business-like manner,

This is possible. More on this in part 2 of this post.

2. The time and effort you put into the activity indicate you intend to make it profitable,

Absolutely, that is the intent.

3. You depend on income from the activity for your livelihood,

Problematic. Considering the difficulty of getting on a game show and then winning money while on it, no one should depend on game show winnings as a sole means of support.

4. Your losses are due to circumstances beyond your control (or are normal in the start-up phase of your type of business),

The latter part applies. It is reasonable that one must incur expenses to try to get on a game show.

5. You change your methods of operation in an attempt to improve profitability,

This certainly should apply, since the approach to appearing on a particular game show requires customization of effort.

6. You, or your advisors, have the knowledge needed to carry on the activity as a successful business,

Somewhat problematic, unless you or your advisors have ever been employed as a contestant coordinator or as a contestant. Still, there are many books that proffer advice. There is also the occasional TV show.

7. You were successful in making a profit in similar activities in the past,

This depends on one’s individual situation. I personally have won money before as a game show contestant (a pittance for winning on a small-time GSN show), but did I show a profit then? Not really. The whole point of this blog is to determinedly obtain a profit.

8. The activity makes a profit in some years, and the amount of profit it makes, and

This is a critical point. One cannot simply aspire to appear on a game show, but to go beyond and strategize as to how to win money (i.e., to maximize your profit).

9. You can expect to make a future profit from the appreciation of the assets used in the activity.

Not applicable, since the assets mostly will be books, software, and perhaps a buzzer system. These will all depreciate upon purchase.

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