You'll need to sign in or create an account to connect with an expert.
Simple answer: 2 years.
The general rule is that if you have not turned a profit in at least three of the prior five years, the IRS will categorize your business as a hobby.
But, it depends on the other details of your activity. That rule is not automatic and you can make a case if the IRS audits you.
The IRS expects that if you start a business, you intend to make money at it. If you don't, your business is likely to be a hobby. To determine if your business is a hobby, the IRS looks at numerous factors, including the following:
Simple answer: 2 years.
The general rule is that if you have not turned a profit in at least three of the prior five years, the IRS will categorize your business as a hobby.
But, it depends on the other details of your activity. That rule is not automatic and you can make a case if the IRS audits you.
The IRS expects that if you start a business, you intend to make money at it. If you don't, your business is likely to be a hobby. To determine if your business is a hobby, the IRS looks at numerous factors, including the following:
Still have questions?
Make a postAsk questions and learn more about your taxes and finances.
walsung
Level 1
Chrissenior1952
Level 1
zzz8881
New Member
ualdriver
Level 3
mjmoor60
New Member
Did the information on this page answer your question?
You have clicked a link to a site outside of the TurboTax Community. By clicking "Continue", you will leave the Community and be taken to that site instead.