Maria runs a small business in her spare time, where she makes a few hundred dollars a year doing small arts and crafts projects for friends. She doesn't appear to run the activity with the intent of operating as a business, and spends the bulk of the material purchases for supplies on her own personal arts in crafts. She wants to take a loss for these supply purchases against the income. Which statement best reflects the way to treat this kind of income$/$expense$?$

Select one:

a$.$ She should just not report it$,$ since nobody knows about it and it is very small.

b$.$ She should report the income and take expenses up to the same income as an itemized deduction, since the activity is most likely a hobby and not a business.

c$.$ She should complete the Schedule C and take all the supply costs at a loss to lower her AGI.

d$.$ She should report the income and ignore reporting the expenses because they don't matter.