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:

Deductible

An amount of any loss that is to be paid by the insured.

Inflationary Times

Periods characterized by a general increase in prices and fall in the purchasing value of money.

Insurance Policies

Contracts between an insurer and a policyholder, outlining the terms under which the insurer agrees to pay a benefit upon the occurrence of a specified risk or event.

Bank Interest Rates

The percentage at which interest is paid by a borrower for the use of money that they borrow from a bank.