M

r$.$ Monk is a self$-$employed computer consultant who earns more than $$100,000$ each year. He

Iso is an enthusiastic artist. This year, he spent $$4,900$ on oil paints, canvasses, supplies, and

essons at a local studio. Mr$.$ Monk made several trips to the National Gallery in Washington, D$.$C$.,$

o attend lectures on painting technique. His total travel costs were $$3,350.$ Compute the effect o$!$

r$.$ Monk's painting revenue and expenses on his AGI under each of the following assumptions:

a$.$

b$.$

c$.$

Mr$.$ Monk earned $ $13,290$ from sales of his paintings. This was the sixth consecutive year that

the painting activity generated a profit.

Mr$.$ Monk earned $$2,000$ from sales of his paintings. The painting activity has never generated

a profit.

Mr$.$ Monk earned $$2,000$ from sales of his paintings. The painting activity also generated a net

loss four years ago but was profitable in each of the past three years