Income Tax Fundamentals 2020 (with Intuit Proconnect Tax Online)
38th Edition
ISBN: 9780357108239
Author: Gerald E. Whittenburg, Martha Altus-Buller, Steven Gill
Publisher: Cengage Learning
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Chapter 3, Problem 25P
Lew is a practicing CPA who decides to raise bonsai as a business. Lew engages in the activity and has the following revenue and expenses:
Sales $ 5,000
Fertilizer, soil, pots 1,500
- What are the factors that the IRS will consider when evaluating whether the activity is a business or a hobby?
- If the activity is deemed to be a regular business, what is the amount of Lew's loss from the activity?
- If the activity is deemed to be a hobby, what is the amount of Lew's expenses (if any) from the activity that may be deducted?
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
$_____________
$_____________
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Chapter 3 Solutions
Income Tax Fundamentals 2020 (with Intuit Proconnect Tax Online)
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