1. Allen is a single taxpayer with AGI of $210,000. Included in his AGI are $175,000 of salary, $20,000 of interest income, $9,000 of dividends, and $6,000 of net long-term capital gain. Allen received no foreign income. What is Allen's net investment income tax liability this year?

$228 $380 $760 $342 $1,330

2. Ted operates a talent agency as a sole proprietorship. This year he paid the following expenses in connection with the operation of the agency.

50 lunches with current clients $4000 10 meals with potential clients 1,000 50 green fees to play golf with clients 6,000 10 gift baskets costing $100 given to 10 clients 1,000 1 wedding reception for Ted's daughter; guests included 10 clients 10,000

What amount of the above expenses may Ted deduct (after any limitations)?

$2,750 $0 $2,500 $5,250 $5,000

3.

Otto, a self-employed taxpayer with AGI of $60,000, operates a bakery. This year, one of Otto's ovens caught fire and was completely destroyed. Otto's adjusted basis in the oven was $8,000 and he paid $10,000 to replace it. The fire also damaged a kitchen cabinet located near the oven. Otto's basis in the cabinet was $1,000 and he paid $600 to repair it. Otto's insurance company paid $6,000 as reimbursement of his losses on the oven and cabinet. What is the amount of Otto's casualty loss deduction?

$5,000 $2,600 $2,500 $0 $3,600