HOBBY VS. FOR PROFIT ACTIVITIES
01.Core Concepts
Hobby Activity • Income is included above the line • Expenses (Before 2018) (permanently repealed by OBBBA) • Allowed only to extent of income • Deducted below the line • Subject to the 2% floor • Unless deductible without regard to profit motive (such as mortgage interest & taxes) Profit Activity • Deduct expenses above the line • At-risk and passive loss rules may apply