Which of the Following Is a True Statement

question 3

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.The regulations provide a list of factors for determining whether an activity is profit motivated.The presumption that a hobby is profit motivated depends upon whether the activity generates a profit in three of five consecutive years.

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Definitions:

Representative Sample

A sample that closely mirrors the characteristics of the population from which it is drawn, ensuring the results of a study can be generalized.

Random Sample

A sample selected in such a manner that each member of the population has an equal chance of being included, ensuring the generalizability of results.

Cross Cultural Sample

A selection of research subjects drawn from multiple cultures intended to analyze how cultural contexts influence behaviors, beliefs, or other phenomena.

Statistical Inference

The process of drawing conclusions about populations or scientific truths from data subject to random variation.