Which of the following is relevant in deciding whether an activity is profit-seeking or a hobby?
A)The time and effort expended.
B)The expertise of the taxpayers or their advisers.
C)The history of income or losses from the activity.
D)The tax benefits of the activity to the taxpayer.
E)All of the above factors are to be considered.

Question

Quizplus · Accepted Answer

All of the factors listed are relevant in deciding whether an activity is profit-seeking or a hobby. The time and effort expended, the expertise of the taxpayers or their advisers, and the history of income or losses from the activity are all factors that can help determine the taxpayer's intention with the activity. The tax benefits of the activity to the taxpayer may also be a consideration, but should not be the sole determining factor. Therefore, all of the factors listed should be considered when determining if an activity is profit-seeking or a hobby.

Which of the Following Is Relevant in Deciding Whether an Activity