During 2018, Fred Reardon incurred the following expenditures in connection with his coin collecting activities: Travel expenses $10,000 Purchase of coins still held at end of year 11,000 Cost of...


During 2018, Fred Reardon incurred the following expenditures in connection with his coin collecting activities:






















Travel expenses



$10,000



Purchase of coins still held at end of year



11,000



Cost of coins sold during year



9,000



Total



$30,000



Fred received $16,000 for the coins sold during the year.


(a.) If Fred's coin collecting activities are considered to be a hobby for tax purposes, what related expenditures are deductible on his 2018 tax return? Show computations and explain in detail.


(b.) If Fred's coin collecting activities are considered to be a trade or business for tax purposes, what related expenditures are deductible? Show computations and explain in detail.



Jun 01, 2022
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