In Determining Whether an Activity Should Be Classified as a Hobby

question 89

Multiple Choice

In determining whether an activity should be classified as a hobby, the tax law provides a rebuttable presumption with regard to the profits or losses of an activity.Which of the following statements describes the profit/loss test which must be satisfied in order to meet the presumption that the activity is not a hobby?

• A)The activity shows a profit for 3 of the 5 previous years.
• B)The activity shows a loss for 3 of the 5 previous years.
• C)The activity shows a profit for 3 of the 7 previous years.
• D)The activity shows a loss for 3 of the 7 previous years.
• E)None of the above.

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Definitions:

Navigate

To move through or operate within a digital environment, such as websites, software applications, or databases.

Table Datasheet View

A visualization of a database table displaying the data in rows and columns, similar to a spreadsheet.

Table Design View

A functionality in database systems that allows for the detailed specification and modification of table structures, including fields and data types.

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To bring something into existence; in computing, it often refers to generating a new file, database, or other objects.