Question :
Ginger operates an activity that be eligible as a hobby. Her profit income is $7,000. Her expenses add $800 of interest on inventory loans, $5,200 of expenses in conducting business activities, and $2,000 of depreciation of equipment. Which of the subsequent statements about Ginger's hobby activity is/are correct?
I. Ginger will not identify any taxable income as a result of her hobby.
II. Ginger will deduct the interest of 800 plus $6,200 of other hobby expenses for the year.
III. Ginger can lose at least $1,000 of her depreciation deduction for the existing year.
IV. If Ginger uses the standard deduction she may not get any tax benefit from the hobby expense.
a. Statement I and II are correct.
b. Statements II and III are correct.
c. Statements III and IV are correct.
d. Statements I, II and III are correct.
e. Statements II, III and IV are correct.