I guess I have to ask why is this any different from the situation I reported earlier in this thread. I do occasional surveys online which sometimes lead to interviews for which I am paid. Although the activity is somewhat continuous (I average 5 to 6 paid interviews a month) and certainly not a one-time activity, I do not think of it as a business, I do not keep business records or have a business plan, etc., I don't depend on it for income, I don't do any marketing and I don't track expenses. More to the point, if you look at the IRS definitions on what constitutes a business, it states: "Taxpayers should consider nine factors when determining whether their activity is a business or a hobby, and base their determination on all the facts and circumstances of their activity." The nine factors are:
- Whether you carry on the activity in a businesslike manner and maintain complete and accurate books and records.
- Whether you have personal motives in carrying on the activity.
- Whether the time and effort you put into the activity indicate you intend to make it profitable.
- Whether you depend on income from the activity for your livelihood.
- Whether your losses are due to circumstances beyond your control (or are normal in the startup phase of your type of business).
- Whether you or your advisors have the knowledge needed to carry on the activity as a successful business.
- Whether you were successful in making a profit in similar activities in the past.
- Whether the activity makes a profit in some years and how much profit it makes.
- Whether you can expect to make a future profit from the appreciation of the assets used in the activity. In my case, at least, when I went though each of those nine items, it was obvious that my activity is not a business but more of an income-generating hobby. At first glance, I would think the student who does occasional teaching as a way of helping out in the classroom may fit into this category as well, no?
