Mario paints landscape portraits,and he treats the activity as a hobby.During the current year,Mario incurred the following expenses while earning $2,500 from sales of paintings:
$\begin{array}{lr}
\text { Paints and supplies } & \$ 2,200 \
\text { Utilities expenses for his studio } & 1,000 \
\text { Advertising } & 300 \
\text { Insurance on his studio and equipment } & 700
\end{array}$
Mario uses the standard deduction and never itemizes his deductions.How should Mario report all of the items related to his hobby on his tax return?

Question

Quizplus · Accepted Answer

Hobby income must be reported as gross income, but hobby expenses are not deductible for AGI. Since Mario uses the standard deduction, he cannot deduct hobby expenses.

Mario Paints Landscape Portraits,and He Treats the Activity as a Hobby.During