Reference no: EM131768888

Question 1. Which of the following is not a passive activity?

Owning a business and not materially participating

Having rental condos

Owning a LP interest in a real estate limited partnership

Owning a working interest in oil and gas properties

Question 2. An individual is considered a Material Participant if they pass which of the following tests?

The Individual participates in the activity for more than 500 hours during the year.
The Individual participates in the activity for more than 50 hours during the year.
The individual is passionate about the business activity.
The individual is an expert in the business activity.

Question 3. What IRC Section prescribes the "Hobby Loss" rules?
No such set of rules
IRC §138
IRC §183
IRC 469

Question 4. Dave had to drive from Pittsburgh to the Cleveland Clinic numerous times during 2016; he incurred 1,053 miles and spent $650 on gas. What, if anything, can he deduct as a medical expense on his 2016 return?
$650
$200
Nothing, travel expenses are not a deductible medical expense.
$850

Question 5. What is an appropriate home office expense?
Childcare costs while taxpayer working.
Improvements made to taxpayer's master bathroom.
Allocable share of mortgage interest.
Allocable share of main phone line.

Question 6. Lewis owned an LP interest in Kate Partners, LP. He did not materially participate in the activity. On the date he gifted the Kate partnership interest to his son, Travis, his basis was $33,000. Suspended losses amounted to $10,000 as of that date. What is Travis's adjusted basis in the gift?

Question 7. (TCO G) During the current year, Sam Marzella, a married taxpayer who files a joint return, reports the following items of income and loss: AGI, consisting of salary income, of $130,000, and a rental real estate loss of $40,000. Sam actively participates in the rental activity. Determine Sam's AGI for the current year.