(1) Hobby expenses are always deductible to the extent of:

A: Adjusted Gross Income

B: 2% of Adjusted Gross Income

C: Investment Income

D: Hobby Gross Income

E: Hobby expenses are never deductible

(2) Laura gives publicly traded stock to her daughter, Louise, when the stock's fair market value is $50,000. Laura paid $65,000 for the stock when she bought it 3 years ago. If Louise sells the stock for $64,000 in the current year, her recognized gain or loss will be:

A: $0

B: $1,000 loss

C: $14,000 Gain

D: $64,000 Gain

E: $50,000 Gain