Detailed Answer
(a) The requirement is to determine the correct statement
regarding the deductibility of an individual’s losses on
transactions entered into for personal purposes. An individual’s
losses on transactions entered into for personal purposes are
deductible only if the losses qualify as casualty or theft losses.
Answer (b) is incorrect because hobby losses are not deductible.
Answers (c) and (d) are incorrect because losses (other than by
casualty or theft) on transactions entered into for personal purposes
are not deductible.