Question

Which of the following statements is correct?

1) Hobby expenses are always fully deductible.

2) The deduction for the allowed hobby expenses is an itemized deduction, but not subject to the 2 percent floor.

3) Hobby expenses that are deductible on Schedule A in 2019 without reference to whether they are incurred in an activity designed to produce income, such as certain taxes, remain fully deductible.

4) The financial status of the taxpayer is not considered in determining whether activities are engaged in for profit.

Answer 1

The financial status of the taxpayer is not considered in determining whether activities are engaged in for profit is th CORRECT statement.

  Hobby expenses are always not fully deductiblle. There are certain conditions to claim hobby expenses as deduction.

The deduction for the allowed hobby expenses is an itemized deduction and it is subject to 2% floor.

From 2018, Hobby expenses that are deductible on Schedule A in 2019 without reference to has to incurred in releation to an activity designed to produce income, such as certain taxes, remain fully deductible..

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AJAY KUMAR.