Harold conducts a business with the following results for the year: Amortization
ID: 2416030 • Letter: H
Question
Harold conducts a business with the following results for the year:
Amortization of intangibles
If the activity was a hobby, Harold will report $ _______as income and deduct $ _______ as expenses.
Not sure what to put in the blanks. I know the first blank is $20,000, but how much is deducted as expenses if its a hobby?
680
Amortization of intangibles
If the activity was a hobby, Harold will report $ _______as income and deduct $ _______ as expenses.
Not sure what to put in the blanks. I know the first blank is $20,000, but how much is deducted as expenses if its a hobby?
680
Explanation / Answer
The income will be = $ 20,000
Expense to be deducted:
Depreciation on car = $ 3,960
Operating expense of the car = $ 3,100
Hence the expense for the activity = $ 3,960+ $ 3,100
= $ 7,060
Note: Rent,wages and amortization of intangible assets were not related to car expense, Hence those expenses were not treated as expense relating to car.