Juanita Knits Blankets as a Hobby and Sells Them

question 129

Multiple Choice

Juanita knits blankets as a hobby and sells them.In the current year,she earns $5,000 from her blanket sales and incurs expenses of $600.Juanita does not itemize deductions.On her tax return,she should

• A)report $5,000 of hobby income and deduct $500 of hobby expenses from AGI.
• B)report $5,000 of hobby income and deduct $400 of hobby expenses for AGI.
• C)report $5,000 of hobby income and deduct nothing from AGI since Juanita does not itemize deductions.
• D)report no hobby income and no hobby deductions.

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Definitions:

Balance Of Payments

A statement that summarizes a country's transactions with the rest of the world, including trades, loans, and payments.

Productive Investments

Investments channeled towards the enhancement of production capabilities, technological advancements, or efficiency improvements in an economy.

British Pound

The currency of the United Kingdom, known officially as the pound sterling, and recognized by its symbol £.

Exports

Goods or services produced in one country and sold to buyers in another, contributing to a country's economic growth and balance of trade.