4th yr no profit. Business or Hobby?

[Npagosa]

I've run a business for four years at this point. I need opinions on whether I should file as a business or as a hobby income.

• It is filed as an LLC
• Separate accounting and banks
• I wouldn't be doing it if I didn't want a profit
• There is a business plan (it hasn't been updated since formation).
• I haven't turned a profit in the four years since the foundation.
• My time gets prioritized as a stay-at-home parent.
• I do advertise some.
• I have previous experience, credentials, and higher education in the field.

[ee-ea]

The regulation should help you decide.

https://www.law.cornell.edu/cfr/text/26/1.183-2

[Rick19744]

The regulation provided certainly helps in your decision making process.

As is usually the case, making decisions depends on your particular set of facts and circumstances.

Based on the limited facts, two areas are what I believe the IRS might focus on:

• You indicate that your time and energy is now focused on your kids; meaning the "business" is not your main focus
• Apparently there must be other income within the family to support everyone; meaning whether you are working in your "business" or not, this income is not a priority.

Just give the above some thought as you attempt to make your decision.