How much does hobby need to earn to be considered a business?

If you think it's a hobby, with taxable income and you pay taxes on that, then the IRS classifying it as a business, with tax _loss_ reducing your taxes, you end up with more than you would (according to your correct classification).

Seth

This is a very helpful post. Certainly better than cryptic one liners.

However, since the IRS only "can" (i.e. if it chooses to do so) place the burden of proof on the business owner that he is engaged in a for profit activity in the absence of the statutory presumption, you can only say the practical effect is that the presumption does change in those cases in which the IRS takes the position that there is not a for profit business activity in the absence of the statutory presumption. That will not always occur. I know of instances where a for profit activity has never met the statutory presumption test, and yet was never questioned by the IRS (and rightly so).