Lew started a business writing a popular syndicated Japanese gardening column in the current year and will report a profit for his first year. His results of operations are as follows:

\begin{array}{lr}\text { Gross income } & \$ 38,000 \\\text { Travel expense } & 4,000 \\\text { Business suits, to vi sit magazine editors } & 1,000 \\\text { Transportation, } 831 \text { miles (at } 58 \text { cents per mile) } & 482 \\\text { Entertainment } & 800 \\\text { Subscription to bonsai and Japanese gardening magazines } & 500 \\\text { Gifts: } 8 \text { at } \$ 100 \text { each; } 2 \text { at } \$ 20 \text { each } & 840 \\\text { Rent and utilities for ap artment, in total } & 10,000\\\text { (15 percent is used for a home office) }\end{array}

What is the net income Lew should show on his Schedule C? Show the calculation of his taxable income.

\begin{array} { l } \text { Gross income} &\$\_\_\_\\ \text {Expenses (describe each) } \\&\_\_\_\\&\_\_\_\\&\_\_\_\\&\_\_\_\\&\_\_\_\\&\_\_\_\\&\_\_\_\\&\_\_\_\\ \text {Taxable income }&\$\_\_\_\\\end{array}

Which of the Following Is Not a Factor That the IRS

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