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发帖数: 709 | 1 Homer is an executive who is paid a salary of $80,000. Homer also paints
landscapes as a hobby. This year Homer expects to sell paintings for a total
of $750 and incur the following expenses associated with his painting
activities:
Travel $1480
Paints and canvas 610
Painting classes 230
What is the effect of Homer's hobby on his taxable income? Assume his AGI
does not reflect his painting activities and that he itemizes deductions but
has no other miscellaneous itemized deductions.
My answer: 750
The painting selling will increase his AGI and Taxable income by 750 but
none of his expense deductions are deductible.
Thank you so much. | v********0
发帖数: 3010 | 2 是不是说loss is fully deductible
but not exceed to the gain. 但是expense是不deductible的？ | w*******u
发帖数: 36 | 3 Read this:
What are allowable hobby deductions under IRC 183?
If your activity is not carried on for profit, allowable deductions cannot
exceed the gross receipts for the activity.
Deductions for hobby activities are claimed as itemized deductions on
Schedule A, Form 1040. These deductions must be taken in the following order
and only to the extent stated in each of three categories:
Deductions that a taxpayer may claim for certain personal expenses, such as
home mortgage interest and taxes, may be taken in full.
Deductions that don’t result in an adjustment to the basis of property,
such as advertising, insurance premiums and wages, may be taken next, to the
extent gross income for the activity is more than the deductions from the
first category.
Deductions that reduce the basis of property, such as depreciation and
amortization, are taken last, but only to the extent gross income for the
activity is more than the deductions taken in the first two categories. |
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