Tom A., a married taxpayer with a small child has

Tom A., a married taxpayer with a small child has decided to begin mining cryptocurrency out of his home. He still has a full time job. His wife is not involved in any way in his crypto mining activities. He has decided to use a small spare bedroom to house the electronic equipment needed. He has spent $40,000 on the computer equipment, and has had a separate electrical system installed (cost $5,000). He also has installed separate air conditioning equipment $5,000. His electrical for this activity alone was $$7,000. He made $35,000 in gross revenue from hard forks with air drops. He continues to work his full time job at 45+ hours per week with an annual income of $250,000 (assume standard deduction). He has attended several online seminars about cryptocurrency and plans to continue. He also created an LLC and operates his crypto activities through the one owner LLC.

a. Will this activity be treated as a regular schedule C activity or a hobby?

b. If Tom’s activities are treated as a hobby, what is his overall taxable income?

c. If Tom’s activities are treated as are regular income producing activity, what is his overall taxable income?