Amount of Profits Earned and
Occasion of such Profits

Obviously, if the activity produces consistent profits, there’s no problem. There are no losses of concern. If the profits our only occasional and the losses are more frequent, the tests here are twofold. First, a relatively large profit, even if only occasional, would tend to support the idea that it is a business more than a hobby. Second, if the losses are relatively larger than the occasional small profits, and consistently so, that attends to be viewed more as a hobby.

Please contact Topolinski & Associates regarding more information on this topic.