Molly is a full-time engineer for Y-Corporation. On the weekends, Molly enters fishing competitions in order to earn cash prizes. Molly really enjoys the relaxation of fishing and being near the water. Molly made $5,200 in income and incurred the following expenses during the year for her fishing activities: Contest Entrance Fees: $5,000 Property taxes on boat: $200 Fishing supplies: $1,000 Depreciation on equipment: $500 Which of the following statements is FALSE about Molly’s fishing activities? Group of answer choices Molly’s income from her fishing activities is taxable, even though the fishing activities constitute a hobby. Hobby losses are not allowed as a deduction. Since hobby expenses are categorized as miscellaneous itemized
Molly is a full-time engineer for Y-Corporation. On the weekends, Molly enters fishing competitions in order to earn cash prizes. Molly really enjoys the relaxation of fishing and being near the water. Molly made $5,200 in income and incurred the following expenses during the year for her fishing activities: Contest Entrance Fees: $5,000 Property taxes on boat: $200 Fishing supplies: $1,000 Depreciation on equipment: $500 Which of the following statements is FALSE about Molly’s fishing activities? Group of answer choices Molly’s income from her fishing activities is taxable, even though the fishing activities constitute a hobby. Hobby losses are not allowed as a deduction. Since hobby expenses are categorized as miscellaneous itemized
Chapter6: Deductions And Losses: In General
Section: Chapter Questions
Problem 6BCRQ
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Molly is a full-time engineer for Y-Corporation. On the weekends, Molly enters fishing competitions in order to earn cash prizes. Molly really enjoys the relaxation of fishing and being near the water. Molly made $5,200 in income and incurred the following expenses during the year for her fishing activities:
Contest Entrance Fees: $5,000
Property taxes on boat: $200
Fishing supplies: $1,000
Which of the following statements is FALSE about Molly’s fishing activities?
Group of answer choices
Molly’s income from her fishing activities is taxable, even though the fishing activities constitute a hobby.
Hobby losses are not allowed as a deduction.
Since hobby expenses are categorized as miscellaneous itemized deductions, they are currently disallowed as deductions.
Molly’s hobby expenses are fully deductible.
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