Gary is an architect who also sings at weddings. This year, he received $5,400 in fees for his singing and spent $6,250 on voice lessons, sheet music, and travel to the weddings. Which of the following statements is true?

Question

Quizplus · Accepted Answer

Gary can still treat his singing activity as a business even with a loss. He can deduct his loss up to $850 as an above-the-line deduction if he can prove that his singing activity is a for-profit business. However, if he cannot prove that it's a business but still wants to deduct the loss, he can only do so as an itemized deduction on his tax return.

Gary Is an Architect Who Also Sings at Weddings