The iRS considers nine factors in distinguishing between a business and a hobby and no one factor is determinative.
- Whether you carry on the activity in a businesslike manner and maintain complete and accurate books and records.
- 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 change your methods of operation in an attempt to improve profitability.
- 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.
See https://www.irs.gov/faqs/small-business-self-employed-other-business/income-expenses/income-expenses
You need to continue filing Schedule C as long as you have a sole proprietorship that generates income and expenses unless and until you close the business and cease operations.
