Using the farm optional method, Victor's net earnings amount to what based on his gross farm income of $540?

To determine Victor's net earnings using the farm optional method based on a gross farm income of $540, it is essential to understand how this method calculates net earnings. The farm optional method is a simplified approach for farmers to report their net self-employment earnings when they are primarily engaged in farming.

Under this method, if a farmer's gross farm income is below a certain threshold, the net earnings can be considered $0. This means the optional method can suggest that no self-employment income is derived for tax purposes when the gross farm income is limited.

In this scenario, since Victor's gross farm income is $540 and if this amount does not exceed qualifying thresholds applicable when using the farm optional method, it would result in net earnings of $0. This aligns with tax guidelines intended for those with minimal farming activity, as the optional method is meant to streamline income reporting while recognizing that some farmers may not generate substantial net earnings despite a gross income figure.

Thus, for Victor, the calculation leads to the conclusion that his net earnings, in this case, amount to $0.