Tess Has Started a New Part-Time Business

question 38

True/False

Tess has started a new part-time business.She is concerned that the IRS will call it a hobby if her return is audited.This first year of business showed a small profit,and she expects it to continue to show modest profits.She would like to take advantage of the three out of five year profit rule to shift the burden of proof to the IRS.Because of the three-year statute of limitations,this will not be possible for the first year of business.

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Definitions:

Productivity

The measure of the efficiency of a person, machine, factory, system, etc., in converting inputs into useful outputs.

Human Relations

The study and practice of creating harmonious and effective interactions in professional and personal settings.

Working Groups

Groups formed to achieve a specific goal or task, usually characterized by a focused and collaborative approach.

Hawthorne Studies

A series of influential experiments in industrial organization conducted in the 1920s and 1930s at the Hawthorne Works in Chicago, highlighting the impact of work conditions on productivity.