Which of the Following Is a True Statement

question 6

Multiple Choice

Which of the following is a true statement?

• A) Expenses associated with a "hobby" are never deductible.
• B) The deductibility of an activity's expenses in excess of revenues depends upon whether the activity is primarily profit-motivated or a hobby as determined by facts and circumstances.
• C) Taxpayers engaged in a "hobby" are always presumed to be motivated by profit.
• D) The regulations do not provide any guidance for determining whether an activity is profit motivated.
• E) All of these are true.

---

Definitions:

Timid

Showing a lack of courage or confidence; easily frightened or hesitant.

Withdawn-rejected

Pertaining to individuals, especially children, who are socially withdrawn and subsequently rejected by their peers.

Isolate

To separate an individual or object from others, either physically or socially.

Prosocial

Behaviors that are intended to benefit others, including acts of kindness, generosity, and cooperation.