In Determining Whether an Activity Should Be Classified as a Business

question 95

True/False

In determining whether an activity should be classified as a business or as a hobby, the satisfaction of the presumption (i.e., profit in at least 3 out of 5 years) ensures treatment as a business.

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Definitions:

Franchise Agreement

A legal contract in which a franchisor grants the franchisee the rights to operate a business under the franchisor's brand and system for a specified period.

Legal Relationship

The connection between entities or individuals established through the laws and regulations of a jurisdiction, defining rights, duties, and liabilities.

Precise Conditions

Specific and clearly defined terms or circumstances under which something operates or exists.

Professional Guidance

Advice and expertise provided by individuals with specialized knowledge to help others in making informed decisions.