Bob Smith a professional basketball player raises Black Angus cattle under circumstances that would indicate that the activity is a hobby.
His adjusted gross income for the year is $80000 and he has $1000 of other miscellaneous itemized deductions all of which are subject to the two-percent
floor. During the taxable year the feed for the cattle cost $3000. The income from the sale of cattle was $2800. (a) Under the hobby loss rule to what extent is the expense of $3000 deductible?
(b) Under the two-percent-of-adjusted-gross-income limitation how much is the overall deductible amount of his itemized deductions?