Which of the Following Factors Absolutely Must Be Present for an Activity

question 37

Multiple Choice

Which of the following factors absolutely must be present for an activity to be considered a trade or business for tax purposes?

• A)The activity is profitable most of the time.
• B)Taxpayer has experience in the activity.
• C)Taxpayer has a mailing address and phone number for his business that is different from his personal address and phone number.
• D)Taxpayer has a profit motive for engaging in the activity.
• E)All of the above factors must be present to have a trade or business activity.

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Definitions:

Innovator

A person or organization that introduces new ideas, products, or methods, leading to change or development in a particular field.

Production Possibilities Frontier

A curve illustrating the maximum feasible amount of two commodities that a society can produce using all available resources efficiently.

Economic Growth

An increase in the production of goods and services in an economy over a period of time, often measured as the percent increase in Gross Domestic Product (GDP).

Production Possibilities Curve

A graphical representation that shows the maximum combination of two goods that can be produced with available resources and technology.