Fundamentals of Taxation 2011 4th Edition by Ana Cruz, Debra Prendergast, Dan Schisler, Michael Deschamps

Exercise 15

During the current year, Joshua worked 1,300 hours as a tax consultant and 450 hours as a real estate agent. His one other employee (his wife) worked 300 hours in the real estate business. Joshua earned $50,000 as a tax consultant, and together the couple lost $20,000 in the real estate business. How should Joshua treat the loss on his federal income tax return?