Which of the following statements regarding farming income is correct?

Question 3 options:

a)

A full-time lawyer recognized a $11,500 loss this year from his part-time farming activities. The maximum deduction allowed this year from the farm loss is $7,000.

b)

A full-time lawyer has income from his part-time farming activities. His farming income must be calculated on an accrual basis.

c)

A full-time lawyer recognized a $11,500 loss this year from his part-time farming activities. The maximum deduction allowed this year from the farm loss is $2,500.

d)

A full-time lawyer has income from his part-time farming activities. His farming income must be calculated on a cash basis.