Why are these factors so important in making this$$ determination?

A$.$

Whether an activity is$$ profit$-$motivated or not depends upon the intent of the taxpayer. These factors provide an objective way of determining a$$ taxpayer's intent. Losses incurred in a$$ profit$-$motivated activity are not$$ deductible, whereas losses incurred in a personal activity are generally deductible.$$ Thus, external indications of a$$ taxpayer's motive or intent are extremely important in determining the deductibility of an expenditure.

B$.$

Whether an activity is$$ profit$-$motivated or not depends upon the intent of the taxpayer. These factors provide an objective way of determining a$$ taxpayer's intent. Expenses incurred in a$$ profit$-$motivated activity are$$ deductible, whereas expenses incurred in a personal activity generally are not deductible$($with certain$$ exceptions$).$ Thus, external indications of a$$ taxpayer's motive or intent are extremely important in determining the deductibility of an expenditure.

C$.$

Whether an activity is$$ profit$-$motivated or not depends upon the intent of the taxpayer. These factors provide an objective way of determining a$$ taxpayer's intent. Capital losses incurred in a$$ profit$-$motivated activity are not$$ deductible, whereas capital losses incurred in a personal activity are generally deductible.$$ Thus, external indications of a$$ taxpayer's motive or intent are extremely important in determining the deductibility of an expenditure.

D$.$

These factors determine if an expense is deductible or not. Expenses incurred in a$$ profit$-$motivated activity are not deductible$($with certain$$ exceptions$),$ whereas expenses incurred in a personal activity generally are deductible.$$ Thus, external indications of a$$ taxpayer's motive or intent are extremely important in determining the deductibility of an expenditure.