Mr. D works full-time as a systems analyst for a consulting firm. In addition, he sells plants that he raises himself in a greenhouse attached to his residence. During the past 5 years, the results from raising and selling the plants have been as follows:

Year Net Profit (Loss)

Year 1 $(2,000)

Year 2 (1,200)

Year 3 1,000

Year 4 2,500

Year 5 (500)

Lacking evidence to the contrary, this activity is presumed to be an activity carried on for profit, and the $500 loss in Year 5 can be taken on D’s Year 5 tax return.

A. True.

B. False.