Glenn is an accountant who races stock cars as a hobby. This year Glenn was paid a salary of $80,000 from his employer and won $2,000 in various races. What is the effect of the racing activities on Glenn's taxable income if Glenn has also incurred $4,200 of hobby expenses this year? Assume that Glenn itemizes his deductions but has no other miscellaneous itemized deductions.
A. increase in taxable income of $1,640.
B. no change in taxable income.
C. decrease in taxable income of $560.
D. decrease in taxable income of $2,200.
E. increase in taxable income of $2,000.
Answer: E
You might also like to view...
Consumers often ignore marketing information sent to them after joining a permissions marketing program because:
A) the products are too costly B) the marketing pieces are not relevant any more C) they can no longer win prizes or receive free gifts D) the person has moved and did not leave a forwarding address or e-mail
How does automation assist with the lean manufacturing philosophy?
The effective interest method produces a constant dollar amount of interest expense to be reported each interest period
Indicate whether the statement is true or false
An express ratification takes place when the principal behaves as if she has the intention of ratifying an unauthorized agreement
a. True b. False Indicate whether the statement is true or false