Matt is a full-time engineer for Y-Corporation. On the weekends, Matt rents a booth at...
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Matt is a full-time engineer for Y-Corporation. On the weekends, Matt rents a booth at Budget Barbers where he styles hair. Matt made $5,000 in income and incurred the following expenses during the year for his hair-styling activities:
Booth rent: $5,000
Property taxes on equipment: $200
Styling supplies: $1,000
Depreciation on equipment: $500
Which of the following statements is NOT true about Matts hair styling activities?
Group of answer choices
Since hobby expenses are considered personal in nature, only category 1 expenses are deductible as itemized deductions.
Hobby expenses are only allowed to the extent of income
If Matt qualifies for the standard deduction, he is required to claim the hobby income and receives no offsetting deductions.
Matts hair styling activities constitute a hobby and the income is nontaxable
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