60% Mon 3:14PM ° eBook Calculator Tax Drill Hobby Losses Complete the following

Question

60% Mon 3:14PM ° eBook Calculator Tax Drill Hobby Losses Complete the following statements regarding hobby losses The Regulations stipulate that nine factors should be considered in determining whether an activity is profit-seeking or is a hobby The presence or absence of a factor is notby itself determinative of whether the activity is profit-seeking or is a hobby. The Code provides a rebuttable presumption that an activity is profit-seeking if the activity shows a profit in at least of the previous tax years. If these profitability tests are met, the activity is presumed to be a trade or business rather than a personal hobby Feedback 7 Check My Work Business or investment expenses are deductible only if the taxpayer can show that the activity was entered into for the purpose of making a profit. Certain activities can have attributes that make it difficult to determine if the primary motivation for the or is for personal pleasure. activity is to make a profit Previous Next Check My Work

Explanation / Answer

The code provides a rebuttable presumption that an activity is profit seeking if the activity shows a profit in at least THREE of the previous FIVE tax years.

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