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"Does that make this business a hobby?"

For your business to be a "business" you must have the intent of making a profit.
If the only thing that kept you from making a profit was the depreciation on capital expenditures that your business will use over a period of several years, your chances of making a profit would appear to me to be quite good.
If your business loses money year after year, at some point the IRS will challenge it.
Now, if your business is your only source of income, there is less likely to be a challenge of that sort. The nature of the business also is involved. If you are breeding racehorses and your capital expenditure is your breeding stock, and in the first 3 years you don't make a dime, while your medical practice is writing off the costs, that will be looked on with suspicion. If you have a business landscaping lawns and the first year you bought a bunch of equipment but next year you are likely to make a profit, and you have no other source of income, I believe the IRS would wait a few years before cracking down.
See the difference?
Best wishes, Chris
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