During 2012, Fred Reardon incurred the following expenditures in connection with his coin collecting activities:
Fred received $16,000 for the coins sold during the year.
(a.) If Fred's coin collecting activities are considered to be a hobby for tax purposes, what related expenditures are deductible on his 2012 tax return? Show computations and explain in detail.
(b.) If Fred's coin collecting activities are considered to be a trade or business for tax purposes, what related expenditures are deductible on his 2012 tax return? Show computations and explain in detail.

Question

During 2012, Fred Reardon incurred the following expenditures in connection with his coin collecting activities:
  Fred received $16,000 for the coins sold during the year.
(a.) If Fred's coin collecting activities are considered to be a hobby for tax purposes, what related expenditures are deductible on his 2012 tax return? Show computations and explain in detail.
(b.) If Fred's coin collecting activities are considered to be a trade or business for tax purposes, what related expenditures are deductible on his 2012 tax return? Show computations and explain in detail.

Quizplus · Accepted Answer

The Answer of During 2012, Fred Reardon incurred the following expenditures in connection with his coin collecting activities:
  Fred received $16,000 for the coins sold during the year.
(a.) If Fred's coin collecting activities are considered to be a hobby for tax purposes, what related expenditures are deductible on his 2012 tax return? Show computations and explain in detail.
(b.) If Fred's coin collecting activities are considered to be a trade or business for tax purposes, what related expenditures are deductible on his 2012 tax return? Show computations and explain in detail.

During 2012, Fred Reardon Incurred the Following Expenditures in Connection