1. Jan sculptures as a hobby. If she sells $2,000 worth of sculptures and incurs $2,500 of expenses, she will report:

a. $2,000 of itemized deductions

b. $2,500 of itemized deductions

c. $2,000 Trade or Business deductions on Schedule C

2. T has salary of $50,000, interest income of $20,000, passive income of $10,000 and investment interest expense of $60,000. T's investment interest expense deduction is:

a. $10,000

b. $20,000

c. $30,000

d. $60,000

e. $60,000

3. If you borrow $2,000,000 to buy a $3,000,000 home, how much will be allowed as the basis for an interest deduction?

a.None, home mortgage deduction is no longer allowed as it is unfair to renters

b.$ 1,000,000

c. $1,100,000

d. $2,000,000