In Determining Whether an Activity Should Be Classified as a Hobby

question 89

Multiple Choice

In determining whether an activity should be classified as a hobby, the tax law provides a rebuttable presumption with regard to the profits or losses of an activity.Which of the following statements describes the profit/loss test which must be satisfied in order to meet the presumption that the activity is not a hobby?

• A)The activity shows a profit for 3 of the 5 previous years.
• B)The activity shows a loss for 3 of the 5 previous years.
• C)The activity shows a profit for 3 of the 7 previous years.
• D)The activity shows a loss for 3 of the 7 previous years.
• E)None of the above.

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Definitions:

Mood

A temporary state of mind or feeling that can influence perception and behavior.

Student Motivation

The level of enthusiasm, drive, and energy that a student brings to the learning process, influencing their engagement and success in academic tasks.

Challenging and Specific Goals

Objectives that are clearly defined and require effort beyond what is usual to achieve, promoting higher levels of performance.

Persistence

Continued effort or determination to achieve something despite difficulties, failure, or opposition.