Which of the following is true for hobby related expenses?

a.	They are limited to the amount of hobby income and treated as miscellaneous itemized deductions to the extent the expenses are not otherwise deductible.
b.	They are limited to the amount of hobby income and treated as deductions FOR AGI to the extent they are not otherwise deductible.
c.	They are non-deductible unless they are of the kind of expenses which are otherwise deductible.
d.	They must be capitalized and amortized over 180 months.
e.	None of the above are true.

2. On July 1 of the current year, Tom converted a machine from personal use to business use. At the time of the conversion, the machine was worth $10,000. Five years ago Tom purchased the machine for $100,000. What is the basis of the machine for cost recovery?

a.	$10,000.
b.	$90,000.
c.	$100,000.
d.	$110,000.
e.	None of the above.