i know many of us believe if we get/charge one red cent it's a business
while we all are of course entitled to our own opinions i really think that one can charge for cake supplies and not be running a business according to the irs:
Generally, an activity qualifies as a business if it is carried on with the reasonable expectation of earning a profit.
In order to make this determination, taxpayers should consider the following factors:
Does the time and effort put into the activity indicate an intention to make a profit?
Does the taxpayer depend on income from the activity?
If there are losses, are they due to circumstances beyond the taxpayer’s control or did they occur in the start-up phase of the business?
Has the taxpayer changed methods of operation to improve profitability?
Does the taxpayer or his/her advisors have the knowledge needed to carry on the activity as a successful business?
Has the taxpayer made a profit in similar activities in the past?
Does the activity make a profit in some years?
Can the taxpayer expect to make a profit in the future from the appreciation of assets used in the activity?
The IRS presumes that an activity is carried on for profit if it makes a profit during at least three of the last five tax years, including the current year — at least two of the last seven years for activities that consist primarily of breeding, showing, training or racing horses.
i remember being told on here something to the effect that generating any income at all is a business--rahr
but this says p.r.o.f.i.t--and profit is of course what's leftover after expenses--if all we take in is ingredient/material expenses we cannot possibly make a profit thus i think it says we are hobbyists
and i truly truly ishtabooli do not believe it constitutes a business
if a caker in the u.s. has no reasonable intention of making a profit and so many of us operate this way then yes we are engaging in a hobby
and there are some of us who intend to make a profit but we never will --those might be closet hobbyists :)
not trying to start a rip snorting debate--just putting this view out there from the irs