Your scenario involves a facts and circumstances test and the relevant factors are laid out in Treas. Reg. §1.183-2 (link below).
https://www.ecfr.gov/cgi-bin/text-idx?SID=2c8c515e70d79f99314ab3dd0c63c6f4&mc=true&node=se26.4.1_118...
Per Code Section 183(d), taxpayers are allowed a safe harbor whereby it is presumed the activity is engaged in for profit if in 3 of 5 consecutive years the activity is profitable.
See https://www.irs.gov/pub/irs-utl/irc183activitiesnotengagedinforprofit.pdf
