Hi thanks for your help!
I have no idea whether to consider it a hobby or business. Here are the answers to the questions you provided me.
Question
How do you distinguish between a business and a hobby?
Answer
In making the distinction between a hobby or business activity, take into account all facts and circumstances with respect to the activity. A hobby activity is an activity not done for profit. This includes activities done mainly for sport, recreation, or pleasure. No one factor alone is decisive. You must generally consider these factors in determining whether an activity is a business engaged in making a profit:
- Whether you carry on the activity in a businesslike manner and maintain complete and accurate books and records. - Yes I maintain records
- Whether you have personal motives in carrying on the activity. - not sure what this means.
- Whether the time and effort you put into the activity indicate you intend to make it profitable. - yes I intend to continue making it profitable and grow it.
- Whether you depend on income from the activity for your livelihood. - no it does not currently provide my livelihood as it does not earn enough. Down the line it is my hope desire and intention to use the income to help support my family but it does not currently make enough.
- Whether your losses are due to circumstances beyond your control (or are normal in the startup phase of your type of business). - not sure what this means I only know I can't control the amount of traffic I receive which is what contributes to the earnings.
- Whether you or your advisors have the knowledge needed to carry on the activity as a successful business. - I don't have advisors. its just me.
- Whether you were successful in making a profit in similar activities in the past. - I have no similar activities in the past to compare to.
- Whether the activity makes a profit in some years and how much profit it makes. - It has never made profit before, this is the only and first year I have made profit.
- Whether you can expect to make a future profit from the appreciation of the assets used in the activity. - not sure what appreciation of assets are. My only form is earning is: affiliate marketing/pinterest creator programs/google Adsense.
Can you tell based on my answers whether this is a hobby or a business?
Thanks for all your kind help.
-Vanessa
