Terry is a practicing attorney who decides to become an agent for musical groups on the side.Terry engages in the activity and has the following revenue and expenses: $\begin{array}{llcc}
\text { Agent fees from clients} &\$500 \
\text {Travel to concert sites around the country } &6,500\
\text {Business entertainment } &5,000\
\text {Depreciation on video and TV equipment used to showcase clients } &3,000\

\end{array}$

a.What are four of the factors the IRS will consider when evaluating whether her activity is a hobby?
b.If the activity is deemed to be a regular business, what is the amount of Terry's net income or loss from the activity?
c.If the activity is deemed to be a hobby, what is the amount (if any) of Terry's expenses from the activity that may be deducted?

Question

Terry is a practicing attorney who decides to become an agent for musical groups on the side.Terry engages in the activity and has the following revenue and expenses: $\begin{array}{llcc}
  \text {  Agent fees from clients} &\$500  \
 \text {Travel to concert sites around the country  } &6,500\
 \text {Business entertainment  } &5,000\
 \text {Depreciation on video and TV equipment used to showcase clients  } &3,000\

\end{array}$
 
a.What are four of the factors the IRS will consider when evaluating whether her activity is a hobby?
b.If the activity is deemed to be a regular business, what is the amount of Terry's net income or loss from the activity?
c.If the activity is deemed to be a hobby, what is the amount (if any) of Terry's expenses from the activity that may be deducted?

Quizplus · Accepted Answer

The Answer of Terry is a practicing attorney who decides to become an agent for musical groups on the side.Terry engages in the activity and has the following revenue and expenses: $\begin{array}{llcc}
  \text {  Agent fees from clients} &\$500  \
 \text {Travel to concert sites around the country  } &6,500\
 \text {Business entertainment  } &5,000\
 \text {Depreciation on video and TV equipment used to showcase clients  } &3,000\

\end{array}$
 
a.What are four of the factors the IRS will consider when evaluating whether her activity is a hobby?
b.If the activity is deemed to be a regular business, what is the amount of Terry's net income or loss from the activity?
c.If the activity is deemed to be a hobby, what is the amount (if any) of Terry's expenses from the activity that may be deducted?

Terry Is a Practicing Attorney Who Decides to Become an Agent