1. TF06.001 Deductions are allowed unless a specific provision in the tax law provides otherwise. True False 2. TF06.030 If a taxpayer operates an illegal business, no deductions are permitted. True False 3. TF.08.006 The maximum cost recovery method for all personal property under MACRS is 150 % declining balance. True False 4. TE07.040 The purpose of the excess business loss rules is to limit the amount of nonbusiness income (e.g, salaries, interest, dividends) that can be sheltered from tax as a result of business losses True False 5. TE.08.002 The basis of cost recovery property must be reduced by at least the cost recovery allowable. True False