The intention to generate income (hobby) has always been a point of contention regarding the tax recognition of losses between tax authorities, tax courts, and taxpayers. The author provides a clear and comprehensive examination framework for determining the intention to generate income based on the criteria used by jurisprudence, administration, and literature. Additionally, there is a systematic classification within the context of income tax, as well as a critical analysis of this subjective characteristic of the legal definition, leading to a proposal for a new legal regulation based on objective criteria. This work is aimed at scholars and practitioners of tax law.