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Many small businesses come from a hobby.
If you spend time and money on an activity and can produce some business from it, you would like to be able to treat it as a business, especially if you can use expenses as deductions. However, the IRS has some thoughts on this you need to know. Generally, a hobby is an activity you do for personal pleasure or recreation. It is not an activity entered into with the intention of making a profit. The IRS takes many facts into account when determining whether you are carrying on an activity for profit.