98- Virtual currency is treated as property for U.S. Federal tax purposes. General tax principles that apply to property transactions apply to transactions using virtual currency. Consequently, all of the following are true regarding virtual currency except:

A. Wages paid to employees using virtual currency are not taxable to the employee and are not subject to Federal income tax withholding and payroll taxes

B. Payments using virtual currency made to independent contractors and other service providers are taxable and self-employment tax rules generally apply

C. The character of gain or loss from the sale or exchange of virtual currency depends on whether the virtual currency is a capital asset in the hands of the taxpayer

D. A payment made using virtual currency is subject to information reporting to the same extent as any other payment made in property

105- Generally, if the taxpayer is an independent contractor, he or she is considered self-employed, and should report income (nonemployee compensation) on which schedule?

A. Schedule A (Form 1040)

B. Schedule B (Form 1040)

C. Schedule C (Form 1040)

D. Schedule D (Form 1040)

106- When considering whether an activity is a hobby or a business, which of the following is correct?

A. A hobby is defined as an activity done regularly in one's leisure time for pleasure and does not result in a profit

B. Schedule C can be used to report income derived from a hobby

C. An activity is a business if it makes a profit during at least three of the last five tax years, including the current year

D. All of the above