Not for profit activities include hobbies and the losses are limited to the income from given activities. When considering decisive factors, some are:
Whether the activity was carried on in a businesslike manner
The time and effort put into the activity
Whether the taxpayer depends on the income for their livelihood
Losses are due to circumstances beyond the control of the taxpayer
Changes in methods of operation are made in an attempt to improve profitability
Taxpayer has the knowledge needed to carry on the activity as a successful business
Taxpayer was successful in making a profit in similar activities in the past
The activity makes a profit in some years
Taxpayer can expect to make a future profit from the appreciation of the assets used in the activity.