Which of the Following Would Not Be Used to Determine

question 61

Multiple Choice

Which of the following would not be used to determine if an activity is a business or a hobby?

• A)The time spent by the taxpayer in the business
• B)The number of relatives employed by the taxpayer
• C)The actual profits of the business
• D)The expertise of the taxpayer's consultants

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Definitions:

Consumption Component

The part of total economic output that is used by individuals and households for personal needs and wants.

Additions to Inventory

Increases in the quantity of goods held by a company during a particular period, often for future sale or production use.

Reductions in Inventory

Decreases in the quantity of goods that a company holds, which can indicate stronger sales or a preparation for lower demand.

Investment Component

A part of economic theory that represents funds allocated towards investment products or goods with the expectation of future returns or income.