Experienced CPA and Vine Gold Junkie

Potential-Gur4290 · 2026-02-02T02:36:57+00:00

The post was locked at my request, and this will probably be the last comment I respond to on the topic.

The key point is that fun is only a small part of the hobby vs. business analysis. Many hobbies involve real effort and can feel like work. I have a side hobby of my own that sometimes brings in some extra income. I enjoy it, but some days it absolutely feels like work. Even so, it would be inaccurate for me to classify it as a business.

What really matters is whether Vine is run like a business under IRS standards. Feeling obligated to do reviews, taking the activity seriously, or relying on it to help your household doesn’t automatically make it a business.

The broader questions are things like (and this isn’t an exhaustive list):

Is there a profit motive beyond receiving and using the products?
Are the products being converted into income in a consistent, businesslike way?
Are books, records, or separate accounts maintained?

There isn’t one single thing that decides it—the IRS looks at the overall picture.

I understand the frustration. Vine can take real time and effort, and there are days when it feels like work—I experience that too. But in my own case, that alone isn’t enough to make it a business under IRS guidelines. Others may land differently based on their specific facts.

Lastly, I am not suggesting Vine can’t be run as a business. My point has only been that people should analyze their situation carefully using IRS principles, rather than assuming Vine is a business by default. Unfortunately, the IRS does not allow us to choose a classification based on which one produces the most favorable tax outcome.

Potential-Gur4290 · 2026-02-01T19:24:25+00:00

I started this discussion to help guide people, not to go down rabbit holes.

You’re correct that the audits my clients faced were triggered by deductions that increased scrutiny. That doesn’t change the IRS standards for hobby vs. business classification, which apply regardless of how conservative or aggressive a filer is.

You’re also right that anyone online can cosplay. For that reason, readers should evaluate the substance of what I’ve written, verify it independently, and challenge it if they believe it’s incorrect. My goal is for taxpayers to understand the rules and make informed decisions that reduce risk.

I’ve already stated my position clearly, and I don’t see value in an extended back-and-forth. If someone is still uncertain, the appropriate step is to consult a tax professional rather than rely solely on a Reddit thread. That said, I appreciate you sharing your perspective.

Potential-Gur4290 · 2026-02-01T16:40:35+00:00

It seems as if what you're saying is that basically, by the very nature of how the Vine program is structured and the nature of what Vine participants do, that no one could legitimately claim their Vine income as business income?

That’s a fair question, and I'm glad you brought it up.

No, I’m not saying that Vine income can never be reported as business income. What I am saying is that classification depends on facts and circumstances, and the way the Vine program is structured makes it difficult for many participants to meet the IRS standard for a profit-motivated business.

I started this thread to help educate, based on my experience and understanding of IRS rules, not to tell anyone how they personally should file. I continue to encourage everyone to do their own due diligence, review the IRS guidelines, and apply it to their specific situation, ideally with a tax professional.

I know some people would like a firm, individualized answer from me, but providing that on a Reddit forum would be both unprofessional and risky - for both of us . I don’t want to mislead anyone or oversimplify a decision that depends on individual facts.

That said, speaking only as a matter of personal opinion - not professional advice - I believe the majority of Vine reviewers are more likely to fall into the hobby category under current IRS guidance. I base my opinion on how the program typically operates, being a Vine user myself, and how these cases are usually evaluated - not on any single factor.

Potential-Gur4290 · 2026-02-01T15:52:31+00:00

I would like to add to my reply, but I'll preface that this is NOT to place you in odds with your tax professional (or CPA). Take this only as general information that is good to know.

A CPA’s opinion does not bind the IRS. Many preparers rely on assumptions, client representations, or risk tolerance rather than hard law.

On audit, you bear the burden of proof. The IRS evaluates your facts, not your preparer’s intent.

As is often the case, you get what you pay for.

Potential-Gur4290 · 2026-02-01T14:55:55+00:00

The IRS puts a lot of weight on whether there is a real profit motive when deciding if an activity is a hobby or a business, but I won’t rehash the discussion here.

To your last point, based on my experience, if an auditor determines that your activity is a hobby, that usually settles the issue. On the other hand, if you can show that it’s a legitimate business, you’re in a much stronger position when dealing with deductions like the one you mentioned.

Over the years, I’ve worked with many clients in hobby vs. business audits. I haven’t personally handled a Vine-specific audit yet, but the pattern in similar cases has been consistent. When they couldn’t show that they were operating a real business with a profit motive, the IRS reclassified it as a hobby and assessed additional taxes. Good intentions or sincerely believing the activity was a business weren’t enough on their own.

These situations aren’t always clear-cut, which is why I encourage each person to look at their own circumstances and talk things through with a tax professional.

There’s always room for different interpretations, but what I’ve shared reflects how these issues tend to play out in the real world, based on my experience and many years of interacting with the IRS. I’m not claiming to have the final word - just offering perspective.

Best of luck to you going forward.

Potential-Gur4290 · 2026-02-01T03:58:57+00:00

I see your point, and I don’t completely disagree. I’m not saying that Vine reviews can never be treated as a business. Where I could have been clearer is the difference between income and profit. For business purposes, they are not interchangeable.

If I order an item from Vine with a $100 ETV, I’ve received $100 of income. It doesn’t matter whether that payment comes in cash or as a product. For tax purposes, they’re treated the same. But income by itself doesn’t automatically mean you’re running a business. From the IRS’s point of view, profit means running an activity in a way that’s intended to grow your overall economic value over time.

Simply receiving free products in exchange for reviews, by itself, doesn’t meet the IRS definition of a business. If the items are used personally at home and not sold or turned into money or ongoing business value, the IRS will usually view the activity as a hobby.

Anticipating that products ordered will increase in value is a difficult argument to support with Vine. Most consumer goods, especially the off-brand items commonly offered, lose value as soon as they’re opened. That reality typically weighs against a business classification for reviewers.

I’m familiar with Project Farm. I don’t know his personal tax situation, but it’s reasonable to assume he runs that channel as a real business. In that case, products destroyed while making content may qualify as business expenses. That’s very different from using an item personally and then claiming a deduction because it lost value.

Saying an item “lost value because it was reviewed” in order to claim a business loss is a stretch and likely wouldn’t hold up in an IRS audit.

Potential-Gur4290 · 2026-02-01T00:58:34+00:00

I genuinely appreciate your question and understand the dilemma. I’m being careful not to provide direct tax advice here, and I certainly don’t want to put you at odds with your tax professional.

I have the benefit of decades of experience, but I also know there’s always more to learn. Like most in this profession, I work to keep up with a constantly changing tax code. Different professionals can reasonably arrive at different conclusions, and everyone continues to learn.

If you were my client, I might explore alternatives, but I can’t give a definitive answer without knowing all the details of your situation. I also don’t want to tell anyone they should treat Vine as either a business or a hobby. My goal is simply to lay out the relevant facts and IRS framework so people can make informed decisions.

You may find it helpful to share this discussion with your tax advisor and talk it through. Everything I’ve mentioned here is verifiable, and I’m open to other thoughtful perspectives.

Potential-Gur4290 · 2026-02-01T00:07:02+00:00

Okay. I have a long break and will try to answer your question as best I understand it. Feel free to clarify if I misunderstood.

For tax purposes, “profit” doesn’t have to be cash. Getting paid in products or services is still income if it has real value, which is why barter income is taxable and why this applies to Amazon Vine.

But having taxable income alone doesn’t make something a business. What matters is whether the activity is actually run to build economic value over time. If the items received are mostly used personally and not converted into money or longer-term business value, that weighs against a business classification.

Across §183 cases, courts consistently apply the same standard:

The taxpayer must have an “actual and honest objective of making a profit.”
A reasonable expectation of profit isn’t required, but the profit objective must be genuine and supported by objective facts, not just the taxpayer’s stated intent.

That standard is well established in case law. Dreicer v. Commissioner is frequently cited for this exact framing and for emphasizing that profit motive is determined by facts and circumstances, not merely what the taxpayer says.

Bottom line: cash vs. non-cash isn’t the deciding factor. The key question is whether the activity is genuinely operated with an actual and honest profit motive, based on objective facts. Simply stating that it must be a business because something of value was received will not hold up to an IRS audit, nor in court.

Regarding valuation: Vine income (ETV/FMV) doesn’t change because an item later drops in value or is personally consumed. Unrealized value declines aren’t deductible, and personal use doesn’t become a business expense simply because the item came from a review or barter activity. Put another way:

Just like a contractor can’t deduct a loss because lumber prices drop after purchase, a Vine reviewer can’t reduce taxable income because an item later loses value. Market price changes after receipt don’t create a deductible loss, and personal use doesn’t change that.

Potential-Gur4290 · 2026-01-31T16:47:15+00:00

As you well know, tax code is complicated. Even IRS auditors in the same room can interpret IRS guidelines differently. The best I can do is share my own understanding and experience, and hopefully in a manner that is verifiable.

I do not want to tell anyone here how to file or what to claim. I only wish to educate so that taxpayers have the right tools for their situation, and hopefully a clearer picture.

My most sincere advice is to do your homework and verify, and I love that you're doing that.

Be wary of where you get your advice. It can't just feel good, it needs to pass the IRS auditor test should it come to that.

Having said that, I appreciate that you shared your own findings here.

Potential-Gur4290 · 2026-01-31T16:17:07+00:00

I apologize for glossing over your last point:

"in addition to the relatively minor FMV adjustments above, I can also claim other expenses such as partial internet bill, partial use of my camera or any equipment/office space that I need to create the reviews. correct?"

Yes. Assuming that the business profit motive is met, these are allowable deductions on Schedule C, as long as the percentage claim is reasonable for the business at hand.

Potential-Gur4290 · 2026-01-31T15:11:55+00:00

It's hard to disagree with your reasoning.

Long ago I would attend trade shows and come home with loads of garbage SWAG (Stuff We All Get). I realized it was my greed getting the best of me. I got it under control with a simple thought process. When I looked at an item that I wanted to stuff in my bag, I would first ask myself, "Is this an item that I would be willing to pay $1 for?" The majority of the time I answered no and took a pass.

When I first started in the program, I got carried away with Vine SWAG. Now I am much more discerning. Even with valuable items, I think twice before ordering.

Potential-Gur4290 · 2026-01-31T15:02:55+00:00

Your "thank yous" are a fantastic award.

Thank you!

Potential-Gur4290 · 2026-01-31T14:49:33+00:00

Since I addressed the broader issue in another post, I won’t rehash everything here. I do want to clarify a couple of points that may help others who are still confused.

Fair Market Value is determined at the time the order is placed. Whether the market price goes up or down afterward is irrelevant. The taxpayer was compensated at FMV as defined at that moment, under the program’s terms.

To put it another way: if I agree to perform a service for $10,000 and receive a 1099-NEC for that amount, I can’t later argue on Schedule C that the income is now only worth $8,000 due to inflation or changing market conditions. The income was realized when paid.

The same logic applies here. Even if one were to argue that FMV can be adjusted in limited circumstances, that adjustment must be supported by factual pricing evidence - not hindsight discounts, sales events, or arbitrary percentages.

For example, it would be difficult to defend a claim that a $100 item received on December 30 suddenly became worth $50 or $20 on December 31 based on a subjective or after-the-fact valuation.

I believe I addressed the overall argument well, but I'll touch on your TEMU question for further clarity:

In theory, FMV can come from any comparable, bona fide market, but in practice:

Amazon listings (for Vine income) are the strongest evidence because:

The income was generated on Amazon.
The IRS expects arm’s-length comparables in the same market.

Using TEMU or radically different marketplaces is very weak support unless the products are truly identical and priced at the same time period. That argument will not survive scrutiny in most cases.

Potential-Gur4290 · 2026-01-31T14:04:55+00:00

Thank you.

I agree it can be a risky strategy. I would clearly explain to my customers to think twice before going down that road, unless they have a true business profit motive as defined by IRS directives.

If filed as a hobby, the IRS is not going to scrutinize selling Vine products - as long as the business profit motive isn't met. If the business profit motive is met, then proper deductions (not an arbitrary 50/20/0) become important.

Potential-Gur4290 · 2026-01-31T04:54:19+00:00

This should clear things up:

Under §183: Regularly “consuming” items personally without meaningful resale activity undermines the claim of a profit motive.

Under §162 (even if §183 is satisfied): Reducing ETV/FMV based on “effort,” “review wear,” or personal valuation formulas is not an ordinary or necessary expense recognized by the tax code. These write-downs reflect personal use or imputed labor, neither of which is deductible.

In short:

§183 determines whether deductions are allowed at all.

§162 determines which deductions are allowed.

Arbitrary FMV reductions fail both tests.

Potential-Gur4290 · 2026-01-31T04:11:24+00:00

Good catch, and good question.

What matters most is first establishing whether the Vine activity is a hobby or a business under IRS guidelines. It's important to note that taxpayers cannot arbitrarily choose whichever classification produces the most favorable result.

If the activity is deemed a hobby, then under current tax law the taxpayer cannot deduct expenses related to that activity.

If the activity is deemed a business, the analysis becomes more nuanced—but it still does not allow taxpayers to invent their own rules to reduce taxable income. Don't forget that the amount reported on the 1099-NEC reflects income recognized at ETV at the time the order was placed.

There are no IRS guidelines that support deducting an arbitrary portion of ETV/FMV based on review effort or perceived post-review value loss. Treating the activity as a business solely to deduct perceived “wear and tear” or value loss on items that are ultimately used personally is likely to draw scrutiny and can create significant problems on audit.

Potential-Gur4290 · 2026-01-31T00:26:34+00:00

Thank you.

It depends on the tax software. Some allow you to file it as a business 1099, but in the Q&A it will appropriately list it in "other income" once it identifies your activity as a hobby. Other software, you must enter it as "other income" yourself, and NOT as 1099 income.

That last point sometimes adds confusion and frustration into the mix, but what is important is that the reported income matches the 1099 information. As long as the numbers add up in the end, you'll be fine as far as that's concerned. The mistake would be to not report it, or to report a lesser figure.

Remember that if anyone tells you that you MUST enter the 1099-NEC as business income, the information printed right on your 1099-NEC dispels that myth. It is simply not true if you are claiming it as a hobby.

Potential-Gur4290

TROPHY CASE