Rebecca is a doctor with an AGI of $143,000 before consideration of income or loss from her dog breeding business. Her home is on 15 acres, 10 of which she uses to house the animals and provide them with ample space to play and exercise. Her records show the following related income and expenses for the current year: Income from fees and sales Expenses: Dog food Veterinary bills Supplies Publications and dues $3,400 $4,900 4,400 1,560 530 Required: a. How must Rebecca treat the income and expenses of the operation if the dog breeding business is held to be a hobby? (Leave no cells blank. Enter "0" wherever required.) b. How would your answer differ if the operation were held to be a business? (Leave no cells blank. Enter "0" wherever required. Enter all losses with a minus sign.)
Rebecca is a doctor with an AGI of $143,000 before consideration of income or loss from her dog breeding business. Her home is on 15 acres, 10 of which she uses to house the animals and provide them with ample space to play and exercise. Her records show the following related income and expenses for the current year: Income from fees and sales Expenses: Dog food Veterinary bills Supplies Publications and dues $3,400 $4,900 4,400 1,560 530 Required: a. How must Rebecca treat the income and expenses of the operation if the dog breeding business is held to be a hobby? (Leave no cells blank. Enter "0" wherever required.) b. How would your answer differ if the operation were held to be a business? (Leave no cells blank. Enter "0" wherever required. Enter all losses with a minus sign.)
Chapter10: Deduct Ions And Losses: Certain Itemized Deduct Ions
Section: Chapter Questions
Problem 23P
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Transcribed Image Text:Rebecca is a doctor with an AGI of $143,000 before consideration of income or loss from her dog breeding business. Her home is on
15 acres, 10 of which she uses to house the animals and provide them with ample space to play and exercise. Her records show the
following related income and expenses for the current year:
Income from fees and sales
Expenses:
Dog food
Veterinary bills
Supplies
Publications and dues
$3,400
$ 4,900
4,400
1,560
530
Required:
a. How must Rebecca treat the income and expenses of the operation if the dog breeding business is held to be a hobby? (Leave no
cells blank. Enter "0" wherever required.)
b. How would your answer differ if the operation were held to be a business? (Leave no cells blank. Enter "0" wherever required.
Enter all losses with a minus sign.)
a Schedule C Business income/loss)
Other Income/(loss)
Expenses-(Schedule A)
b. Schedule C Business income/(loss)
Other Income/(loss)
Expenses-(Schedule A)
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ISBN:
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Author:
Hoffman
Publisher:
CENGAGE LEARNING - CONSIGNMENT