Here’s the question: You sold one photo this year … is this taxable in the eyes of the IRS?
David D. Busch of Digital Photography for Dummies has the answer — I quote a portion of his response:
In general, the IRS uses the following 9-Point Test to determine if your activity is a business or a hobby:
- The manner in which the activity is conducted
- The expertise of the taxpayer
- The time expended on the activity
- The expectation of profit
- The success in other similar or dissimilar activities
- The history of income and losses
- The amount of “occasional” profits
- The financial status of the taxpayer
- How personal pleasure or recreation contribute to the business
Read his reply for further explanation on how the IRS distinguishes your income from photography activities as a hobby or a business.