If a Taxpayer Can Satisfy the Three-Out-Of-Five Year Presumption Test

question 94

True/False

If a taxpayer can satisfy the three-out-of-five year presumption test associated with hobby losses, then expenses from the activity can be deducted in excess of the gross income from the activity.

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Definitions:

RRSP

Registered Retirement Savings Plan (RRSP) is a Canadian financial account designed for individuals to save for retirement, offering tax benefits to incentivize saving.

Compounded Quarterly

Interest on a loan or investment is calculated four times a year, with each interest payment added to the principal.

RRSP

Registered Retirement Savings Plan, a Canadian financial account for holding savings and investment assets, aimed at retirement.

Ordinary Annuity

An annuity that makes regular payments to the annuitant at the end of each payment period for a fixed period of time.