I rent a case at an antique mall. I am using Schedule C. How do I determine gain or loss on a sale if the item that sold has been with me for many years and I have no idea what I originally paid for it or even if I paid for it or received it as a gift? Would this type of activity be better characterized as a hobby since I have yet to make a profit and my expectations are that this will continue?

#1;did you buy it?? Or did you receive it as a gift; aslongas you received it as a gift from someone, then, its basis is its original basis when FMV of the gift was larger than its cost however, A different rule applies if you sell the gift at a loss. If the FMV of the property at the time of the gift was less than the donor's adjusted basis, your basis for loss on its sale or other disposition is its FMV at the time of the gift, plus or minus any required adjustments to basis during the period you held the property. In other words, for purposes of determining losses, you use the lesser of the donor's adjusted basis or the FMV at the time of the gift as your basis. For example, your father gives you XYZ stock today that is currently worth $200. At the time of the gift, he has an adjusted tax basis in the stock of $500. After receiving the stock, you immediately sell it for $200. You do not recognize a loss because your basis in the stock was its FMV at the time of the gift, $200.if you sell it for $700, then your basis’d be $500, NOT $200. If at the time of the cost, its basis was $200 and its FMV was $500 thrn the basis of the gift’d be $200, NOT $500.

#2;I guess not really yet;tax rule reminds taxpayers to follow appropriate guidelines when determining whether an activity is a biz or a hobby, an activity not engaged in for profit; 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.If an activity is not for profit, losses from that activity may not be used to offset other income. An activity produces a loss when related expenses exceed income. The limit on not-for-profit losses applies to individuals, partnerships, estates, trusts, and S corporations. It does not apply to corporations other than S corporations.Deductions for hobby activities are claimed as itemized deductions on Sch A of 1040. These deductions must be taken in the following order and only to the extent stated in each of three categories:deductions that a taxpayer may take for personal as well as business activities, such as home mortgage interest and taxes, may be taken in full;deductions that don’t result in an adjustment to basis, such as advertising, insurance premiums and wages, may be taken next, to the extent gross income for the activity is more than the deductions from the first category;business deductions that reduce the basis of property, such as depreciation and amortization, are taken last, but only to the extent gross income for the activity is more than the deductions taken in the first two categories.