Discuss Whether the Following Persons Are Currently Engaged in a Trade

question 139

Essay

Discuss whether the following persons are currently engaged in a trade or business:
a.Katerina owns 35 home sites in and around Orlando. She bought these vacant lots several years ago in hopes to developing them into a subdivision. She begins to develop the lots in the current year.
b.John spends 2 hours a day, 5 days a week, managing his investment portfolio. He watches the market and buys and sells securities when he thinks the market is right. His investment strategy is to realize dividends, interest, and long-term gains from holding the investments.
c.Bill lives in Miami and works full-time betting on dog races. Although he intends to win large sums, he has failed to win the big one. He considers his betting activities his job and relies on his meager winnings to support his family. He is devoted to the races and has rarely missed a day betting in over 3 years.

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Definitions:

Anti-Chain-Store Act

Legislation aimed at limiting or regulating the expansion and operation of chain stores to protect local businesses and maintain market competition.

Indirect Price Discrimination

A pricing strategy where different prices are charged for the same product or service based on characteristics other than the customer's willingness to pay.

Direct Price Discrimination

The practice of charging different prices to different consumers for the same product or service, based directly on the willingness to pay of each customer.

Cannibalizing

In business, the reduction in sales of a product due to the introduction of a similar product by the same company.