Which of the following regarding farming income is TRUE?
A) Farming income must be calculated on an accrual basis.
B) A taxpayer who earns a full-time income as a lawyer recognized a $40,000 loss this year from her recreational farming activities. The maximum deduction allowed this year from the farm loss is $17,500.
C) A taxpayer who earns a full-time income as a lawyer recognized a $40,000 loss this year from her recreational farming activities. The maximum deduction allowed this year from the farm loss is $21,250.
D) A taxpayer who earns a full-time income as a lawyer recognized a $40,000 loss this year from her recreational farming activities. The maximum deduction allowed this year from the farm loss is $40,000.
Correct Answer:
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