5. If a taxpayer can show that they earned a profit in three-out-of-five previous years, then expenses will never be considered hobby loss and losses from the activity can be deducted in excess of the gross income from the activity. a. True b. False 6. Investigation of a business unrelated to one's present business never results in a current-period deduction of the entire amount if the amount of the investigation expenses exceeds $5,000. a. True b. False 19. Jed is an electrician. He and his wife are accrual basis taxpayers and file a joint return. Jed wired a new house for Alison and billed her $15,000. Alison paid Jed $10,000 and refused to pay the remainder of the bill, claiming the fee to be exorbitant. Jed took Alison to Small Claims Court for the unpaid amount and was awarded a $2,000 judgement. Jed was able to collect the judgement but not the remainder of the bill from Alison. What amount of loss may Jed deduct in the current year? a. $0 b. $2,000 c. $3,000 d. $5,000 e. None of these