Problem regarding the effect of the hobby

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Reference no: EM13992064

As a hobby, Jane creates and sells oil paintings. During the current year, her sales total $8,000. How is the tax treatment of her hobby different from the treatment of a trade or business, if

Her business expenses total $5,600?

Her business expenses total $10,000?

Assume that Jane itemizes her deductions and that she has an adjusted gross income of $42,000 before considering the effect of the hobby. Discuss the actual amount of the deduction Jane would receive in parts a and b.

Reference no: EM13992064

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