Tax Drill - Hobby Losses Complete the following statements regarding hobby losses. The Regulations stipulate that nine factors should be considered in determining whether an activity is profit-seeking or is a hobby. The presence or absence of a factor is not by itself determinative of whether the activity is profit-seeking or is a hobby. The Code provides a rebuttable presumption that an activity is profit-seeking if the activity shows a profit in at least X of the previous X tax years. If these profitability tests are met, the activity is presumed to be a trade or business rather than a personal hobby