If an activity is considered a hobby,which of the following is true?
A)None of the expenses connected with the activity are deductible.
B)The deductible expenses connected with the activity are limited to the income from the activity.
C)The IRS has the burden to prove an activity is a hobby.
D)None of the income connected with the activity is included in income.

Question

Quizplus · Accepted Answer

If an activity is considered a hobby, the deductible expenses connected with the activity are limited to the income from the activity. This means that if the hobby doesn't generate any income, then none of the expenses are deductible. The IRS does not have the burden to prove an activity is a hobby, it is up to the taxpayer to prove that it is a business. None of the income connected with a hobby is not included in income.

If an Activity Is Considered a Hobby,which of the Following