1. PeeDee's wife is a teacher. She makes quilts and sells them at the regional county fairs. This year, she earned $950 from quiltsales and spent $3,300 on supplies and travel relating to her quilting activity. Which of the following statement is true?O Because her primary source of income is from her teaching job, she cannot treat the quilting activity as a business.Because her quilting activity resulted in a loss, she cannot treat it as a business.O If the IRS determines that her quilting activity is a hobby instead of a business, she cannot deduct her $3,300 expenses.If facts and circumstances support her claim that the quilting activity is a business, she can deduct her $3,300 as an itemized deduction. PeeDee needs your help to determine which of the following statement is false:O PeeDee paid his physician $6,200 for routine examinations and lab tests and received a $3,000 reimbursement from his medical insurancecompany. PeeDee is allowed to deduct the $3,200 unreimbursed medical expense as an above-the-line deduction.For federal income tax purposes, a taxpayer may deduct state and local income taxes ($10,000 maximum) as itemized deductions.O In the current year, PeeDee's wife took out a $30,000 student loan to pursue a master degree. They may deduct the annual interestpayment as an above-the-line deduction.O Damage to a personal residence caused by a hurricane that is a federally declared disaster is an example of a casualty loss.

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PeeDee's wife is a teacher. She makes quilts and sells them at the regional county fairs. This year, she earned $950 from quilt sales and spent $3,300 on supplies and travel relating to her quilting activity. Which of the following statement is true? as a business. O Because her primary source of income is from her teaching job, she cannot treat the quilting activity as a Because her quilting activity resulted in a loss, she cannot treat it as a business. O If the IRS determines that her quilting activity is a hobby instead of a business, she cannot deduct her $3,300 expenses. If facts and circumstances support her claim that the quilting activity is a business, she can deduct her $3,300 as an itemized deduction.

PeeDee's wife is a teacher. She makes quilts and sells them at the regional county fairs. This year, she earned $950 from quilt sales and spent $3,300 on supplies and travel relating to her quilting activity. Which of the following statement is true? as a business. O Because her primary source of income is from her teaching job, she cannot treat the quilting activity as a Because her quilting activity resulted in a loss, she cannot treat it as a business. O If the IRS determines that her quilting activity is a hobby instead of a business, she cannot deduct her $3,300 expenses. If facts and circumstances support her claim that the quilting activity is a business, she can deduct her $3,300 as an itemized deduction.

SWFT Comprehensive Volume 2019

42nd Edition

ISBN:9780357233306

Author:Maloney

Publisher:Maloney

Chapter6: Deductions And Losses: In General

Section: Chapter Questions

Problem 35P

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