Whether you report your activity as a hobby or a business depends on your intent @saki93-hotmail-c.
The IRS says you should consider nine things when deciding whether to report your income as a hobby or business.
- Whether the activity is carried out in a businesslike manner and you keep complete and accurate books and records.
- Whether the time and effort you put into the activity shows an intent to make a profit.
- Whether you depend on income for your livelihood.
- Whether any losses are due to circumstances beyond your control or are normal for the startup phase of this type of business.
- Whether you change methods of operation to improve profitability.
- Whether you and your advisors have the knowledge needed to carry out 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.
For more information about hobbies see our article: When the IRS Classifies Your Business as a Hobby
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