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.

Question

Quizplus · Accepted Answer

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. The IRS provides a list of factors for determining whether an activity is profit-motivated, and the presumption that a hobby is profit-motivated depends upon whether the activity generates a profit in three of five consecutive years. Expenses associated with a "hobby" are not always deductible, and the regulations provide guidance for determining whether an activity is profit-motivated.

Which of the Following Is a True Statement