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Passive Activities In January 2022, Julie started some web-based activities. She started selling...

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Accounting

Passive Activities
In January 2022, Julie started some web-based activities. She started selling hand drawn caricature drawings on Etsy and eBay (using photos provided by customers). In addition, she started making some money as her Instagram and TikTok drawings and videos have gained thousands of followers. Julie spends about 7 hours per week making and selling drawings plus another 2 hours on social media activities.
a. Under the 469 regulations, how many activities does Julie have? Explain. If she has more than one option, explain them all and the pros and cons of each.
b. Assume in 2023 that Juie pays contractor Henry to help with drawings and send them to the customers. Henry will spend about 200 hours in 2023 on this work for Julie. Julie will spend about 160 hours in 2023 finding customers. Will Julie be a material participant in 2023? Explain.

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