The distinction between professional business and hobby activities is particularly dif-ficult when there is a personal interest involved in the activity. Such problem emerges in businesses involving horses. According to chapter 13, § 1 of the Swedish taxation law the activity must fulfill certain conditions to be seen as a professional business. The activity has to be professional, durable and pursued in such way that it aims to be profitable or else it can be seen as a hobby. A horse related business must often generate a profit to be seen as a professional business. Once established that the horse related activity is a professional business it must be determined which horses should be included. All horses with an aim to be profitable should be included in the business. If the horse is intended to be sold or used as a breeder it fulfills the requirement to be included in the business. When included in the business the horse have to be classified as an asset. The horse can be classified as either animals in agriculture, current asset or inventory.Profits generated from activities which originate from a farm property can be seen as a professional business without having to fulfill the requirements in chapter 13, § 1 of the Swedish taxation law. The question is whether horse activities carried out on a farm property can be seen as a business solely because it is situated on a farm proper-ty. Profits originating from horse related activities on the property must according to the Swedish Supreme Administrative Court fulfill the business criterions to be taxed as a business. It will not automatically be seen as a business just because it is carried out on a farm property.