Nine-Step Profit Motive Test

Listed below are nine factors that the IRS looks at to decide whether an activity is run for profit (even if losses have resulted), or as a hobby. A "yes" answer supports a finding of a profit motive, although no one factor settles the matter.

Planning to establish a profit motive. How you can go about showing that your activity is operated for profit will depend, in large part, on whether you expect it to profit over either the short run or long run.