Gary is a successful architect who also sings at weddings.This year,he received $5,400 fees from his singing and spent $6,250 on singing lessons,sheet music,and travel to the weddings.If Gary reports this activity as a hobby for federal tax purposes,which of the following statements is true?

Question

Quizplus · Accepted Answer

If Gary reports this activity as a hobby for federal tax purposes, he cannot deduct more than the amount of income he received ($5,400). Therefore, he will have no net profit or loss from this activity, and he will not be required to include the $5,400 in gross income. However, he will not be allowed to deduct any of his hobby expenses as an above-the-line deduction or itemized deduction.

Gary Is a Successful Architect Who Also Sings at Weddings