In talking with Mary, you discover that she runs a knitting business. She knits socks and sweaters and sells them once a quarter at a flea market that she attends. She has been doing this for the last six years and although she tries to make a profit it has never happened (and honestly probably never will). But it keeps her busy. During 2020 she sold $2,000 in sweaters. She provided you with receipts that shows she spent $2,200 in yarn and another $300 in travel costs (fuel, tolls, etc.)

Would the amount sold be taxable and the amount spent be deductible? On a tax return, where would this amount be recorded?