An activity will be classified as a hobby if the taxpayer fails to make a profit from the activity.

Question

Quizplus · Accepted Answer

The classification of an activity as a hobby or a business by the IRS does not solely depend on whether the taxpayer makes a profit. The IRS considers other factors such as the manner in which the taxpayer carries out the activity, the expertise of the taxpayer, the time and effort put into the activity, and the history of income or losses with respect to the activity, among others.

An Activity Will Be Classified as a Hobby If the Taxpayer