In His Spare Time,Fred Likes to Restore Old Furniture and Sell

In his spare time,Fred likes to restore old furniture and sell it to his friends.He is a lawyer by trade.During 2013,he sells $500 worth of furniture and has $21,000 worth of expenses.Which one of the following is true?

A) Fred may deduct all $21,000 of his expenses because Fred is engaged in a hobby.
B) Fred may deduct all $21,000 of his expenses because Fred is engaged in a trade or business.
C) Fred cannot deduct any of the expenses because he is engaged in a hobby.
D) Fred's deductions are limited to the income from selling furniture because he is engaged in a hobby.
E) None of the above.