Terry is a practicing attorney who decides to become an agent for musical groups on the side. Terry engages in the activity and has the following revenue and expenses: $\begin{array}{ll}
\text { Agent fees from clients } & \$ 500 \
\text { Travel to concert sites around the country } & 6,500 \
\text { Business entertainment } & 5,000 \
\text { Depreciation on video and TV equipment used to showcase clients } & 3,000
\end{array}$
a. What are four of the factors the IRS will consider when evaluating whether her activity is a hobby?
b. If the activity is deemed to be a regular business, what is the amount of Terry's net income or loss from the activity?
c. If the activity is deemed to be a hobby, what is the amount (if any) of Terry's expenses from the activity that may be deducted?

Question

Terry is a practicing attorney who decides to become an agent for musical groups on the side. Terry engages in the activity and has the following revenue and expenses: $\begin{array}{ll}
\text { Agent fees from clients } & \$ 500 \
\text { Travel to concert sites around the country } & 6,500 \
\text { Business entertainment } & 5,000 \
\text { Depreciation on video and TV equipment used to showcase clients } & 3,000
\end{array}$ 
a. What are four of the factors the IRS will consider when evaluating whether her activity is a hobby?
b. If the activity is deemed to be a regular business, what is the amount of Terry's net income or loss from the activity?
c. If the activity is deemed to be a hobby, what is the amount (if any) of Terry's expenses from the activity that may be deducted?

Quizplus · Accepted Answer

The Answer of Terry is a practicing attorney who decides to become an agent for musical groups on the side. Terry engages in the activity and has the following revenue and expenses: $\begin{array}{ll}
\text { Agent fees from clients } & \$ 500 \
\text { Travel to concert sites around the country } & 6,500 \
\text { Business entertainment } & 5,000 \
\text { Depreciation on video and TV equipment used to showcase clients } & 3,000
\end{array}$ 
a. What are four of the factors the IRS will consider when evaluating whether her activity is a hobby?
b. If the activity is deemed to be a regular business, what is the amount of Terry's net income or loss from the activity?
c. If the activity is deemed to be a hobby, what is the amount (if any) of Terry's expenses from the activity that may be deducted?

Terry Is a Practicing Attorney Who Decides to Become an Agent