Enrolled Agent Exam [Part 1] 77, Hobby Loss Rules

This podcast is made by Ran Chen, who holds an EA license, Insurance and Securities licenses (Series 6, 63, 65), and the CFP® designation. He is passionate about opening access to high-quality exam preparation resources and helping learners prepare more effectively for professional certification exams. In this episode you will learn: • The post-TCJA rule: hobby income is fully taxable, while hobby expenses are entirely non-deductible. • How to apply the three-out-of-five-year presumption of profit, including the special two-out-of-seven-year rule for horses. • The purpose of the IRS's nine-factor test in determining if an activity is a business or a hobby. • A common exam trap of confusing hobby loss rules with separate passive activity loss limitations. • Why classifying an activity as a hobby can result in taxable income even with an overall economic loss. For more free exam prep tools, practice questions, and AI-powered explanations, visit https://open-exam-prep.com/ or Youtube Channel: https://www.youtube.com/@Open-exam-prep