Problem 6-45 (LO. 3) Alex, who is single, conducts an activity in the current year that is appropriately classified as a hobby. The activity produces the following revenues and expenses: Revenue Property taxes Materials and supplies Utilities Advertising Insurance Depreciation $18,000 3,000 4,500 2,000 5,000 750 4,000 Without regard to this activity, Alex's AGI is $62,000. Determine the amount of income Alex must report and the amount of the expenses he is permitted to deduct. Assume Alex itemizes his deductions. Reportable income: $ Deductible expenses: $ D 10:36 PM 1034 DOC . All Bo TU) WhatsApp Grammarly Problem 6-44 (LO. 3) Jamari Peters (Social Security number 123-45-6789) operates a business with the following results in 2023: Revenue $20,000 Depreciation on car 3,960 Operating expenses of car 3,100 Rent 6,000 Wages 8,200 Amortization of intangibles 680 Jamari estimates that due to a depressed real estate market, the value of land owned by the business declined by $5,200. a. Calculate the effect of Jamari's business on his AGI. Jamari's business has of $ which is reported on his tax return. » All Book « b. How would your answer in part (a) change if the activity was a hobby? If the activity was a hobby, Jamari will report $ as income. Of his expenses, $ are deductible on his tax return.
Problem 6-45 (LO. 3) Alex, who is single, conducts an activity in the current year that is appropriately classified as a hobby. The activity produces the following revenues and expenses: Revenue Property taxes Materials and supplies Utilities Advertising Insurance Depreciation $18,000 3,000 4,500 2,000 5,000 750 4,000 Without regard to this activity, Alex's AGI is $62,000. Determine the amount of income Alex must report and the amount of the expenses he is permitted to deduct. Assume Alex itemizes his deductions. Reportable income: $ Deductible expenses: $ D 10:36 PM 1034 DOC . All Bo TU) WhatsApp Grammarly Problem 6-44 (LO. 3) Jamari Peters (Social Security number 123-45-6789) operates a business with the following results in 2023: Revenue $20,000 Depreciation on car 3,960 Operating expenses of car 3,100 Rent 6,000 Wages 8,200 Amortization of intangibles 680 Jamari estimates that due to a depressed real estate market, the value of land owned by the business declined by $5,200. a. Calculate the effect of Jamari's business on his AGI. Jamari's business has of $ which is reported on his tax return. » All Book « b. How would your answer in part (a) change if the activity was a hobby? If the activity was a hobby, Jamari will report $ as income. Of his expenses, $ are deductible on his tax return.
Chapter3: Business Income And Expenses
Section: Chapter Questions
Problem 22MCQ
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Question
Transcribed Image Text:Problem 6-45 (LO. 3)
Alex, who is single, conducts an activity in the current year that is appropriately classified as a hobby. The activity produces the following
revenues and expenses:
Revenue
Property taxes
Materials and supplies
Utilities
Advertising
Insurance
Depreciation
$18,000
3,000
4,500
2,000
5,000
750
4,000
Without regard to this activity, Alex's AGI is $62,000.
Determine the amount of income Alex must report and the amount of the expenses he is permitted to deduct. Assume Alex itemizes his
deductions.
Reportable income: $
Deductible expenses: $
D
10:36 PM
1034
DOC
.
All Bo
Transcribed Image Text:TU) WhatsApp
Grammarly
Problem 6-44 (LO. 3)
Jamari Peters (Social Security number 123-45-6789) operates a business with the following results in 2023:
Revenue
$20,000
Depreciation on car
3,960
Operating expenses of car
3,100
Rent
6,000
Wages
8,200
Amortization of intangibles
680
Jamari estimates that due to a depressed real estate market, the value of land owned by the business declined by $5,200.
a. Calculate the effect of Jamari's business on his AGI.
Jamari's business has
of $
which is reported
on his tax return.
» All Book
«
b. How would your answer in part (a) change if the activity was a hobby?
If the activity was a hobby, Jamari will report $
as income. Of his expenses, $
are deductible on his tax
return.
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