How much taxable income should each of the following taxpayers report? a. Kimo builds custom…

How much taxable income should each of the following
taxpayers report?

a. Kimo builds custom surfboards. During the current year,
his total revenues are $90,000, and he incurs $30,000 in expenses. Included in
the $30,000 is a $10,000 payment to Kimo’s five-year-old son for services as an
assistant.

b. Manu gives hula lessons at a local bar. During the
current year, she receives $9,000 in salary and $8,000 in tips. In addition,
she engages in illegal behavior, for which she receives $10,000.