makes a profit in some years and if so how much whether you can expect to make a future profit from the appreciation of the assets used in the activity the element of personal pleasure involved in the activity that doesnt mean you cant enjoy your new business but you better be getting more out of it than just a good time quicklisttitle irs looks at everythingtext in determining whether you are carrying on an activity for profit the irs says all the facts are taken into account no one factor alone is decisive so be prepared to come through in several areas to convince the irs that youre making a goodfaith attempt to run a business and not just looking to illegally claim the moreexpansive business tax breaks read more from bankrate tax deductions for charitable giving by successfully transforming your hobby into a business youll be able to deduct your associated expenses on schedule c or cez without worrying about a percentage limitation you might even find a few more you can take such as one for the home office you set up to take care of your new endeavors administrative chores and if you have an occasional year where you lose money the loss can help reduce your other income and lower your tax bill read this story on bankratecom this work is the opinion of the columnist and in no way reflects the opinion of abc news