Question

Which of the following statements is false?

Group of answer choices

Hobby losses are allowed, thereby reducing other taxable income .

Social Security benefits may be partially taxable, depending on the taxpayer's modified AGI.

All sources of income are taxable unless specifically excluded by the Internal Revenue Code.

The double benefit rule states that a taxpayer cannot benefit twice from the same tax item.

Answer 1

FALSE:Hobby losses are allowed, thereby reducing other taxable income.

Reason:Hobby losses are only allowed to deduct or reduce from Hobby Income. They are not allowed to deduct or reduce from other Taxable income. As in Hobby loss or hobby income the purpose of tax payer is not to generate profit or loss so it is not considered as business activities. So hobby loss can only be allowed to reduce from hobby income not from other taxable income.

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