CAN MORE THAN ONE BUSINESS MAKE YOUR HOBBY PROFITABLE?
Internal Revenue Code §183 disallows losses taken regarding any alleged business where there is not a profit motive. If a transaction is not being engaged in for profit, the Internal Revenue Service will disallow all losses related to such activity. The service provides various safe harbors, such as showing a profit three out of five years or five out of seven years. This will establish a presumption that a hobby is not present, but an actual business is. What happens when you run more than one trade or business that are related and one activity creates a loss while others create a profit.