My business is 3 years old and will be showing a loss for the 3rd time. My plan was to pay off the remaining debt and become profitable this year. Due to my state's governor crippling my business by shutting us down for 6 months I didn't hit my goal. Will my business automatically be classified as a hobby or is it just a possibility that the IRS could consider it being a hobby?
It is not a hard and fast rule especially in the wake of the covid tsunami ... just showing a loss is not the determining factor all by itself. https://www.irs.gov/newsroom/hobby-or-business-irs-offers-tips-to-decide