Hobby Loss Rules

1 Credits: Taxes


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Hobby Loss Rules

Course Level
CPE Credits

1 Credits: Taxes

Course Description

This engaging course is designed for tax professionals grappling with the often challenging distinction between hobbies and businesses in tax reporting. Understanding this distinction is not just about applying tax laws; it’s about delving into the intricacies of individual cases where passions intersect with profit. The course offers an in-depth analysis of the criteria for defining a “Trade or Business” and the factors determining whether an activity is pursued for profit, as per IRC Section 162. Participants will gain the ability to critically assess the nine relevant factors that define a hobby or business, and explore how these factors apply in various scenarios. The course includes an examination of relevant case law, providing a practical perspective on how these determinations are made in real-life situations. Additionally, participants will learn how to effectively use and evaluate client questionnaires to ascertain profit motives, equipping them with the tools to advise clients accurately. By the end of this course, participants will not only understand the nuances of distinguishing between a hobby and a business but also be prepared to defend their position in cases where the IRS challenges the classification of an activity.

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Learning Objectives

Upon completing this course, participants will be able to:

  • Extrapolate & Critique the Nine Relevant Factors
  • Examine what is a “Trade or Business”
  • Interpret the presumption that an activity is engaged for profit
  • Explore relevant case law
  • Provide and evaluate Client Questionnaire on Trade or Business Factors Regarding Profit Motive
  • Formulate a plan on how to prove an activity is a trade or business when IRS says otherwise.
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Course Specifics

Course ID
Revision Date
September 14, 2022


Advanced Preparation


Compliance Information

NASBA Provider Number: 103220
IRS Provider Number: 0MYXB
IRS Course Number: 0MYXB-T-02071-22-O
IRS Federal Tax Law Credits: 1
CTEC Provider Number: 2071
CTEC Course Number: 2071-CE-1806
CTEC Federal Tax Law Credits: 1

CFP Notice: Not all courses that qualify for CFP® credit are registered by Western CPE. If a course does not have a CFP registration number in the compliance section, the continuing education will need to be individually reported with the CFP Board. For more information on the reporting process, required documentation, processing fee, etc., contact the CFP Board. CFP Professionals must take each course in it’s entirety, the CFP Board DOES NOT accept partial credits for courses.

CTEC Notice: California Tax Education Council DOES NOT allow partial credit, course must be taken in entirety. Western CPE has been approved by the California Tax Education Council to offer continuing education courses that count as credit towards the annual “continuing education” requirement imposed by the State of California for CTEC Registered Tax Preparers. A listing of additional requirements to register as a tax preparer may be obtained by contacting CTEC at P.O. Box 2890, Sacramento, CA, 95812-2890, by phone toll-free at (877) 850-2832, or on the Internet at

Meet The Experts

A.J. Reynolds, EA

A.J. Reynolds, EA has over thirty years of experience encompassing various areas of taxation. Though his practice centers on Individual, Business, and Estate Tax preparation, A.J. focuses a portion of his practice to IRS Representation. As diverse as his specializations, A.J.’s clientele, too, ranges from average workers to Fortune 500 executives. Additionally, A.J volunteers his time with the Iowa Legal Aid’s Managing Attorney assisting in Tax Court cases and assorted income tax issues. A.J. brings his everyday “in the trenches” experience to seminars and webinars for multiple organizations to assist attendees with real issues affecting tax professionals. A.J. started his …