How much taxable income does mrs hess hobby generate

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Mrs. Hess bakes wedding cakes as a hobby and has developed quite a local reputation for excellence. This year, she sold 29 cakes to family and friends for $200 each and spent a total of $1,700 on ingredients and decorations.

a. How much taxable income does Mrs. Hess's hobby generate if her AGI before consideration of the hobby revenues and expenses is $33,000 and she doesn't itemize deductions?

b. How would your answer change if Mrs. Hess pays enough state and local tax and makes enough charitable contributions to itemize deductions?

Reference no: EM13887644

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