10/23/2026
There is a move before year-end that could've turned your side hustle into a real business, and the rule behind it comes from a 1987 Supreme Court case about a full-time gambler.
Robert Groetzinger lost his sales job in 1978 and started betting on greyhound races, 60 to 80 hours a week, keeping a detailed daily record of every wager. That year, he actually finished with a net gambling loss of about $2,000. But under the tax rules of the time, the IRS hit him with extra tax, arguing that gambling for your own account isn't a "trade or business."
He fought it all the way to the Supreme Court, and won, 6–3. The Court held that you don't need customers, clients, or a storefront to be in business. If an activity is pursued full-time, with continuity and regularity, and with a genuine goal of earning a profit, not as a hobby, it's a trade or business.
Here's why that still matters to you: the same "regular, continuous, profit-motivated" test is what separates a real business from a hobby today. It's the question sitting underneath whether your reselling, trading, content, or rental activity qualifies for business treatment, which affects what you can deduct, self-employment tax, and more.
And it's not about what you do, it's about how you do it. Regular hours. A real profit plan. Clean records. The way you operate during the year is what sets that year's status, which is why the move to make is before the year closes, not after.
Want to explore which tax strategies may apply to your business or side hustle? Start with TaxMD® to discover potential tax-saving opportunities: https://taxmd.com/
Not sure which of your activities actually clear that bar? Book a call with us, we'll show you how. https://scheduler.zoom.us/investor-friendly-cpa/client-intake-investor-friendly-cpa-llc?utm_source=fb&utm_medium=organic&utm_campaign=fbpost&utm_content=friO1
