Andrew's hobby is painting. During 2018, Andrew sold three of his paintings for a total of $2,200. His related expenses include $800 utilities, $1,200 supplies, and $400 in depreciation. Of these expenses incurred, how much can Andrew deduct in the current year?

Question

Quizplus · Accepted Answer

Andrew's painting activity is considered a hobby, not a business. For hobby expenses, he can only deduct expenses up to the amount of income generated from the hobby. Since he earned $2,200 from selling paintings, he can deduct expenses up to $2,200. However, due to tax law changes under the Tax Cuts and Jobs Act, hobby expenses are not deductible for tax years 2018 through 2025. Therefore, Andrew cannot deduct any expenses.

Andrew's Hobby Is Painting