Reference no: EM132380149

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

a-Owning 10% LP interest in a partnership that rents commercial property

b-Owning stock in Microsoft

c-Running a sole proprietorship

d-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?

a-The individual owns 75% of the business activity.

b-The Individual participates in the activity for more than 100 hours per year and not less than any other individual.

c-The individual is an expert in the business activity.

d-The individual participates on a sporadic and insubstantial basis.

Question 3 : Hobby losses are deductible to the extent of:

Wage income

Actual expenses incurred

2% of gross Income from hobby

Gross income from hobby

Question 4 : Dave had to drive from Pittsburgh to the Cleveland Clinic numerous times during 2017; he incurred 1,053 miles and spent $650 on gas. What, if anything, can he deduct as a medical expense on his 2017 return?

$650

$179

Nothing, travel expenses are not a deductible medical expense.

$200

Question 5 : For personal home expenses to be tax deductible, a portion of the home must be used exclusively on a regular basis as?

The principal place of business of the taxpayer.

The principal place where the taxpayer does most of his brainstorming.

The taxpayer uses his home to study for required licensing exams.

Taxpayer must work from home 2 out of 5 days a week.

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? Show your work!

Question 7 : 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 $150,000, and a rental real estate loss of $25,000. Sam actively participates in the rental activity. Determine Sam's AGI for the current year. Show your work!

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