Calculate the Net Income Includible in Taxable Income for the Following

question 77

Essay

Calculate the net income includible in taxable income for the following hobby in 2019: $$\begin{array} { l r } \text { Income } & \$ 23,000 \\\text { Mortgage interest and property taxes allocable to hobby } & 12,000 \\\text { Depreciation } & 4,000 \\\text { Supplies and fees } & 7,000 \\\text { Telephone for hobby } & 3,000\end{array}$$

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Definitions:

Unanticipated Inflation

Inflation that occurs when the general level of prices rises at a rate that was not forecasted or expected by consumers, businesses, or economists.

Saving

The portion of income not spent on current consumption but rather set aside for future use.

Borrowing

The act of obtaining funds from another party with the promise to repay the principal amount along with interest or other charges.

Actual Inflation Rate

The percentage increase in the general price level of goods and services in an economy over a period of time, as measured by the consumer price index or other methods.