Many physicians have sideline business activities but are these activities true active trade or businesses? The IRS has posted a factsheet to its website at http://www.irs.gov/irs/article/0,,id=186056,00.html that provides guidelines for determining when an activity is a hobby, instead of an active trade or business. Under IRC Sec. 183 , activities that are deemed to be hobbies are limited on the amount of deductions that may be claimed. In addition, the deductions are itemized deductions subject to the 2% AGI limitations.