Gary Is a Successful Architect Who Also Sings at Weddings

question 53

Multiple Choice

Gary is a successful architect who also sings at weddings.This year,he received $5,400 of fees for his singing and spent $6,250 on voice lessons,sheet music,and travel to the weddings.Which of the following statements is true?

• A)Because the singing activity resulted in a loss,Gary can't treat it as a business.
• B)If facts and circumstances support Gary's claim that his singing activity is a business,he can deduct an $850 above-the-line loss.
• C)Because Gary's primary source of income is his architecture practice,he can't treat the singing activity as a business.
• D)None of the above is true.

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Definitions:

Surplus Amount

The quantity of a good or service that exceeds what is demanded at a given price.

Producer Surplus

The difference between what producers are willing to receive for a good compared to what they actually receive, essentially the profit.

Price Rises

An increase in the cost of goods or services, often due to factors such as inflation, increased production costs, or higher demand.

Existing Producers

Companies or individuals that are currently producing and selling goods or services within a market.