Artemis Is a University Professor Carrying on an Internet-Based Auction

question 10

Essay

Artemis is a university professor carrying on an Internet-based auction business that is losing money.He is concerned about liability and wants to transfer the business to a corporation he will incorporate.He will be the sole shareholder, director, and officer.He thinks that his business will continue to lose money for the next couple of years before it turns profitable.He is living on his professor's income and plans to continue to deduct the business losses against that income.Can he do this?

---

Definitions:

Depth of Processing

A theory suggesting the depth (shallow to deep) of mental processing affects memory recall; deeper processing leads to better recall.

Retroactive Interference

The phenomenon where newly learned information interferes with the recall of information learned previously.

Proactive Interference

The phenomenon where old memories interfere with the recall of new memories.

Encoding Specificity Principle

The principle that recall is most effective when information available at the time of recall is similar to the information available at the time of encoding.