Helen makes quilts and sells them at the regional county fairs. This year, she earned $950 from quilt sales and spent $3,300 on supplies and travel relating to her quilting activity. If the IRS determines that this activity is a hobby instead of a business, Helen can't deduct her $2,350 net loss.

Question

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If the IRS determines that Helen's quilting activity is a hobby instead of a business, she can't deduct her net loss of $2,350 from her taxes. This is because the IRS only allows deductions for expenses related to a business, not a hobby.

Helen Makes Quilts and Sells Them at the Regional County