Question
For the years 2016 through 2020 (inclusive) Kinza, a best-selling author, has been involved in operating an antique store. In 2016, 2017 and 2018 her
For the years 2016 through 2020 (inclusive) Kinza, a best-selling author, has been involved in operating an antique store. In 2016, 2017 and 2018 her revenue exceeded the expenses from the activity. In 2019 and 2020, the antique store generated a loss. Which statement is correct? (LABEL AND SHOW ALL WORK WITH CALCULATIONS)
A) The activity is a business. The IRS cannot prove it is a hobby.
B) The activity is a hobby. Kinza cannot prove it is a business.
C) The activity is presumed to be a hobby. However, Kinza may prove it is a business.
D) The activity is presumed to be a business. However, the IRS may prove it is a hobby.
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