Sign Up

Why sign in to the Community?

  • Submit a question
  • Check your notifications
or and start working on your taxes
cancel
Showing results for 
Search instead for 
Did you mean: 
jeph15
Level 1

Is the Hobby Loss Rule Automatic?

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?  

2 Replies
Critter-3
Level 15

Is the Hobby Loss Rule Automatic?

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

 

 

jeph15
Level 1

Is the Hobby Loss Rule Automatic?

Thank you! 

Dynamic AdsDynamic Ads
Privacy Settings
v