Ans :
(C) Include $10,000 in income, deduct nothing for AGI, and.
Claim $11,000 of the expenses as itemized.
Explanation:
She should Report $10000 of hobby income in AGI.
She should deduct nothing for AGI as deduction'is subject to
2% of'AGI limitation.
Instead she should itemized her expense of $11000.
( $4000 +$500+ $6500)
Hence, (c) states the correct answer.
Rest' all the options are incorrect.
43. Priscella pursued a hobby of making bedspread ponued a hobby of making heeads in ber e Her AG before considerin...
Priscella pursued a hobby of making bedspreads in her spare time. Her AGI before considering the hobby is $40,000. During 2019 she sold the bedspreads for $10,000. She incurred expenses as follows: Supplies $4,000 Interest on loan to get business started $500 Advertising $6,500 Assuming that the activity is deemed a hobby, how should she report these items on her tax return?