Question

Priscella pursued a hobby of making bedspreads in her spare time. Her AGI before considering the hobby is $40,000. During 2019 she sold the bedspreads for $10,000. She incurred expenses as follows: Supplies $4,000 Interest on loan to get business started 500 Advertising 6,500 Assuming that the activity is deemed a hobby, how should she report these items on her tax return

Answer 1

Answer:

With respect to Adjusted Gross Income we can not deduct anything. She will claim $10,000 in itemized deductions, subject to 2% deductions.

Explanation: