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University of Baltimore Law Review

Abstract

The term "trade or business" is used frequently throughout the Internal Revenue Code, and the determination of whether a taxpayer's activities constitute a trade or business has a major impact on the applicable tax treatment. Unfortunately, no definition of trade or business is supplied in the Internal Revenue Code, the legislative history, or the Treasury Regulations. Consequently, the courts have been left this task and two different standards for determining trade or business status have emerged. In this comment, the author reviews the history of the term "trade or business, " examines the decisional law, and analyzes the two current tests for determining whether a taxpayer is engaged in a trade or business.

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