1. Hobby Losses The hobby loss rules (I.R.C. Section 183) are designed to prevent taxpayers from deducting, by claiming them as business expenses, what are really just the expenses of their hobby or amusement type of activity. For example, I may like to go fishing. I might set myself up as a "charter captain", offering to take people fishing for hire. It is easy to get a license for that, and I could then try to deduct the cost of my boat, my gas, my fishing equipment etc. But maybe I do not advertise, and rarely or never take anyone out fishing. But now I deduct all my fishing expenses. That would be an obvious "hobby loss", not deductible. How about this one? A man is making a lot of money in business, and is in the highest tax brackets. He invests a lot of money to buy 300 acres of farmland, and hires some help, and uses his family members, to build a golf course. He operates the course like a true business. He advertises quite a bit, has a paid staff, managers, good parking, and gets a lot of public play. It in fact operates like a regular public golf course in every way. But it loses money every single year. For 15 years straight, and the owner deducts these losses against his high regular income from his other businesses. Is he in danger of the IRS coming in and saying this is just a hobby, and should not be deductible?