Only a little more than 3 million 1040s are completed by hand each year. That may sound like a lot, but it’s only about 2 percent of returns filed.
Regs. Sec. 1.183-2(b) provides a nonexhaustive list of the nine factors to determine whether an activity is engaged in for profit:
Whether the taxpayer carries on the activity in a businesslike manner;
The expertise of the taxpayer or his or her advisers;
The time and effort expended by the taxpayer in carrying on the activity;
The expectation that the assets used in the activity may appreciate in value;
The success of the taxpayer in carrying on similar or dissimilar activities;
The taxpayer’s history of income or losses for the activity;
The amount of occasional profits, if any, which are earned;
The taxpayer’s financial status; and
Elements of personal pleasure or recreation.
All facts and circumstances are to be taken into account, and no single factor is determinative. The court examined each of these factors in turn and determined that Hylton did not participate in the quarter horse activity with a profit motive as her primary or dominant objective.
– See more at: http://www.thetaxadviser.com/newsletters/2017/mar/determine-profit-motive.html?utm_source=mnl:cpald&utm_medium=email&utm_campaign=28Mar2017#sthash.2ium3kvH.dpuf