Tess Has Started a New Part-Time Business

question 38

True/False

Tess has started a new part-time business.She is concerned that the IRS will call it a hobby if her return is audited.This first year of business showed a small profit,and she expects it to continue to show modest profits.She would like to take advantage of the three out of five year profit rule to shift the burden of proof to the IRS.Because of the three-year statute of limitations,this will not be possible for the first year of business.

---

Definitions:

Meningitis

Inflammation of the meninges of the brain and/or spinal cord.

Inflammation

A biological response to harmful stimuli, such as pathogens or damaged cells, characterized by redness, heat, swelling, and pain, serving as a protective mechanism to initiate healing.

Meninges

The membranes covering the brain and spinal cord.

Influenza

An acute illness characterized by fever, pain, coughing, and general upper respiratory symptoms.