Ecotourism Activity: a Hobby or a Business?

In one case, a dentist conducted ecotourism on his property in Texas and deducted expenses related to this activity. The Tax Court said he lacked an “actual and honest profit objective,” so the activity was a hobby. The result: the hobby loss rules apply, and his deductions claimed on Schedule F that related to this activity were disallowed. While hobby expenses usually are deductible to the extent of income from the activity, due to the suspension of miscellaneous itemized deductions, no write-offs are currently allowed. #IdeaoftheDay