Diane, a Successful Accountant with an Annual Income of $150,000

question 2059

Essay

Diane, a successful accountant with an annual income of $150,000, also enjoys raising and training race horses, an activity in which she spends about 10 hours per week. Over the past five years her winnings from races have amounted to $20,000. She employs neighborhood children to feed the horses but has a professional trainer who works with the horses about 5 hours per week. Discuss some of the factors that might enter into the determination of whether or not this activity is a hobby or a trade/business.

Recognize the legal and financial responsibilities of home ownership.

Understand the financial protections and obligations in renting scenarios.

Know the benefits of different mortgage and payment plans on home affordability.

Grasp the concept of subletting and its implications for renters.

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Definitions:

Corporate Laws

Regulations and legal principles dealing with the formation, operation, and dissolution of corporations.

Legal

Pertains to the system of rules that are created and enforced through social or governmental institutions to regulate behavior.

Corporations

Legal entities formed by individuals, shareholders, or stakeholders, with rights and duties distinct from those of its members, and recognized as such by law.

Preincorporation Contracts

Agreements entered into by the promoters of a company on its behalf before the company has been legally formed.