1. A taxpayer reports the following income and losses from these passive activities:

	Activity	Income or (Loss)
	A	$(40,000)
	B	(10,000)
	C	20,000

The suspended (carryover) loss for Activity A is:

Question 1 options:

1)

$0.

2)

$40,000.

3)

$24,000.

4)

$16,000.

5)	none of the above.

2. The owner of rental property personally uses it 28 days during the year. The home is advertised for rent during the entire year, but sat unused for 250 days during the year. It was used the rest of the year by the following persons:

	The taxpayer's best friend, who pays fair rental, 5 days
	The taxpayer's son and his family, who pay fair rental, 10 days
	Unrelated parties who pay fair rental, 60 days
	The taxpayer's parents, who pay no rent, 12 days

The numerator in the fraction that allocates expenses between rental and personal use and the number of personal days used in determining whether the vacation home rules apply are:

Question 2 options:

1)	65 days at fair rental, 50 personal days

2)	325 days at fair rental, 40 personal days

3)	315 days at fair rental, 50 personal days

4)	75 days at fair rental, 40 personal days

5)	None of the above

3. In order to meet the material participation test for a rental real estate activity, over what number of hours of personal service must the taxpayer must work in rental real estate during the year?

Question 3 options:

1)

100

2)

250

3)

500

4)

750

5)

1,000

4. Teresa, a self-employed consultant, traded in her old computer for a newer model. In addition to trading in her old computer, Teresa paid $7,000 for the newer model. Other relevant information about the trade-in is shown below:

	Cost of original computer traded in	$ 8,000
	Adjusted basis of original computer at date of trade-in	1,000
	List price (FMV) of new computer	10,000
	Trade-in allowance (FMV) for old computer	3,000

Teresa's basis in the new computer is:

Question 4 options:

1)

$1,000.

2)

$7,000.

3)

$8,000.

4)

$10,000.

5)	none of the above.