In Determining Whether an Activity Should Be Classified as a Hobby

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.