How does teresa treat the revenue and expenses

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Question - Teresa is an accomplished actress. During the summer, she rented a vacant store to stage productions of four plays, using the local townspeople as actors and stagehands. She sold $24,000 of tickets to the various plays. Her expenses included $10,000 for copyright fees, $3,000 for store rental, $8,000 for costume purchases and rentals, $2,000 for props and other supplies, and $4,000 for all other miscellaneous expenses related to producing the series of plays.

How does Teresa treat the revenue and expenses if the activity is deemed a business?

How does Teresa treat the revenue and expenses if the activity is considered a hobby?

What are some of the factors that should be considered in deciding if this constitutes a business or a hobby?

Reference no: EM132143736

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