Gary is a successful architect who also sings at weddings.This year,he received $5,400 of 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

According to the IRS, if an activity is conducted with the intention of making a profit, it can be treated as a business even if it results in a loss. Gary can claim an above-the-line deduction of up to $850 for his singing activity if he can establish that it is a bona fide business. The fact that his primary source of income is his architecture practice does not necessarily disqualify his singing activity from being treated as a business.

Gary Is a Successful Architect Who Also Sings at Weddings