7. In 2020, Carla Cox operates an activity deemed to be a hobby by the Internal Revenue Service. Carla generates revenues of $50,000 and ordinary and necessary expenses of $70,000. How should Carla report the activity on her 2020 Form 1040? A. Gross income of $50,000; zero deduction B. Net loss of $20,000 C. Gross income of $50,000; $50,000 deduction for AGI D. Gross income of $50,000; itemized deduction of $50,000 E. None of the above 8. A business bad debt is deductible for tax purposes as a(n): A. Short-term capital loss B. itemized deduction C. Long-term capital loss D. Ordinary business deduction E None of the above