LO.3 Al has been working for an advertising agency during the two years since he graduated from college with a double major in marketing and art. In his spare time, Al enjoys painting landscapes. He sold his first painting in February at an art festival and has sold three more since then through contacts made at the festival. What are the tax consequences of the sales income and the related expenses (e.g., art supplies, cost of travel to the art festival, and advertising in the art festival program folder):

a. If Al’s art activity is classified as a hobby?

b. If Al’s art activity is classified as a trade or business?