Part-time searchers: Any experience with hobby loss / tax write-offs?

October 08, 2025

by a searcher from Azusa Pacific University in Irvine, CA, USA

Hi all, I’m curious to hear from part-time searchers who have been searching for a while—especially those who haven’t closed a deal for 2+ years. How have you approached hobby loss rules and been able to write off your search-related expenses? Since many of us are running searches part-time while working a W2 job, there isn’t much to write off there. But if you’ve been searching without income for multiple years, how have you structured your search to avoid running afoul of IRS hobby loss rules and still deduct business expenses? Would love to hear any strategies, approaches, or lessons learned from those who have navigated this.

Reply by a professional
from University of Massachusetts Amherst in Hartford, CT, USA & Chicago, IL, USA

I'm a CPA that focuses on taxes specifically. If you're a W-2 earner spending out-of-pocket money, that money generally needs to be via a business entity (like an LLC) to substantiate a business purposes (acquisition). From there, the expenses would fall into either Sec###-###-#### start-up cost) or potentially Sec###-###-#### Org. cost), where the expenses would be capitalized and amortized over 15 years, there is some ability with limitations to expensing the initial costs, but it's subject to certain phase outs. There's not any scenarios I can think of or have come across where you can expect 100% business deduction right away for these type of expenses. Unfortunately you're generally limited to a longer timeline for expensing the cost for tax purposes.

Reply by a searcher
from Northwestern University in Hamburg, Germany

I can give some insights for Germany concerning tax write-offs for part-time searcher. DM me.

+3 more replies.

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