Question
Jenny pursued a hobby of making couch covers to sell. Her AGI before considering the hobby is $24,000. During the year she sold her couch
Jenny pursued a hobby of making couch covers to sell. Her AGI before considering the hobby is $24,000. During the year she sold her couch covers for $6,000. She had expenses as follows:
Supplies $3,000
Interest on mortgage loan for her studio inside her home $500
Depreciation on her equipment $1,100
If this acitivity is a hobby, Jenny's tax return would report just for the hobby:
A. 6,000 of taxable income
B. $500 of deductions for AGI
C. 3,500 of deductions for AGI
D. 4,600 of deductions for AGI
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Cornerstones of Managerial Accounting
Authors: Maryanne M. Mowen, Don Hanson, Dan L. Heitger, David McConomy, Jeffrey Pittman
2nd Canadian edition
978-0176721237, 978-0176530884
