Question
Bill paints portraits and treats the activity as a hobby. This year he had $2,500 of income from painting sales, and spent the following amounts:
Bill paints portraits and treats the activity as a hobby. This year he had $2,500 of income from painting sales, and spent the following amounts:
Easel $ 400
Brushes $ 550
Paint $1,300
Canvases $ 300
Advertising $ 175
Studio Rental $ 600
Assuming all the supplies were used up in the paintings he sold, how should Bill report his hobby income and expense on this years tax return?
Group of answer choices
Include $2,500 in income, deduct $ - 0 -
Do not include any of the income or expenses
Include $900 in income, deduct $ - 0
Include $2,500 in income, deduct $2,500 for AGI
Include $900 in income, deduct $175
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