Which of the following would not be used to determine if an activity is a business or a hobby?
A)The time spent by the taxpayer in the business
B)The number of relatives employed by the taxpayer
C)The actual profits of the business
D)The expertise of the taxpayer's consultants

Question

Quizplus · Accepted Answer

The number of relatives employed by the taxpayer is not a criterion used to determine if an activity is a business or a hobby. The IRS and other tax authorities typically look at factors such as time spent on the activity, actual profits, and the expertise of those involved to make this determination, rather than the familial relationships of employees.

Which of the Following Would Not Be Used to Determine