The Internal Revenue Service allows you to take a tax deduction for legitimate losses incurred in the operation of your business.
An online sales business that results in genuine economic losses would almost never be classified as a hobby. Who would do that for fun? If you have an honest profit motive, you are entitled to claim your losses.
You should report your business losses on your 2019 return, sell off what you can in 2020, and end the business.
Remember, though, you can't deduct inventory until you sell it. You can't deduct inventory in 2019 unless you sell it in 2019. Any unsold inventory carries over to 2020 as ending inventory.
**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"
