Generally, for an Activity to Be Treated as a Trade

question 78

Multiple Choice

Generally, for an activity to be treated as a trade or business, which of the following is required:

• A)Always generate a profit
• B)No more than intermittent effort toward the activity
• C)Regular and continual effort designed to seek profit
• D)Organization as a corporation or partnership

---

Definitions:

Par Common Stock

The face value of common stock as stated in the corporate charter, which is the minimum amount at which shares can initially be sold.

Par Preferred Stock

A type of preferred stock that is issued at its nominal or face value, and typically has a fixed dividend rate.

Debit to Cash

An accounting entry that increases the cash balance in a company's books.

Paid-In Capital

The total amount of money investors have contributed to a company in exchange for equity.