Stacy sold business machinery that she held for two years. The accumulated depreciation on business machinery was more than the realized gain on the sale of the machinery. Assume that she sold no other 1231 assets during the year. A portion of Stacy's realized gain will be treated as Sec. 1231 gain.

Select one:

True

False

Henrietta is a photographer. She has the following income and expenses from her photo studio.

Sales of photographs: $2000

Expenses:

Camera Equipment: $3000

Supplies: 500

Rental of equipment 700

Which of the following is true:

Select one:

a. If Henrietta is engaged in a Hobby she reports $2000 income and can deduct $2000 FOR AGI

b. Henrietta's activity cannot be classified as a business because of the inherently personal nature of photography.

c. If Henriett is engaged in a hobby she reports $2000 income and can deduct $2000 FROM AGI

d. If Henrietta is engaged in a hobby she reports $2000 income and cannot deduct any expenses.