Chapter 6 16 points Lindsey Forbes, a detective who is single, operates...
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Accounting
Chapter 6 16 points
Lindsey Forbes, a detective who is single, operates a small pottery activity on a part-time basis. This year she reported the following income and expenses from this activity:
Revenue from sale of pottery $ 9,000
Depreciation on potter's wheel (3,000)
Property taxes on shed where she does pottery (1,200)
Supplies used such as clay, etc. (6,500)
In addition, she had salary of $70,000 and itemized deductions, not including expenses listed above, of $6,800.
a. What is the amount of Lindsey's taxable income assuming the activity is classified as a hobby?
b. What is the amount of Lindsey's taxable income assuming the activity is classified as a trade or business?
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