15. Payments by a cash basis taxpayer of capital expenditures: a. Must be expensed at the time of payment. b. Must be expensed by the end of the first year after the asset is acquired. c. Must be deducted over the actual or statutory life of the asset. d. Can be deducted in the year the taxpayer chooses. e. None of these 16. Which of the following legal expenses are deductible for AGI in 2019? a. Incurred in connection with a trade or business. b. Incurred in connection with rental or royalty property held for the production of income. c. Incurred for tax advice relative to the preparation of an individual's income tax retum. d. Only a. and b. qualify. e. Choices a., b., and c. qualify. 17. Priscella pursued a hobby of making bedspreads in her spare time. Her AGI before considering the hobby is $40,000 During 2019 she sold the bedspreads for $10,000. She incurred expenses as follows: Supplies $4,000 Interest on loan to get business started 500 Advertising 6,500 Assuming that the activity is deemed a hobby, how should she report these items on her tax return? a. Include $10,000 in income and deduct $11,000 for AGI. b. Include $10,000 in income but also include $10,000 expenses which nets to so c. Include $10,000 in income, deduct nothing for AGI, and claim $11,000 of the expenses as itemized deductions, d. Include $10,000 in income and deduct nothing. e. None of these