1- What is the maximum earnings that will be subject to Social Security tax for 2019?

a. $108,400

b. $108,400

c. $128,400

d. $132,900

2- Which of the following statement is true regarding the Mortgage interest deduction and Mortgage Interest Credit?

a. The Home Mortgage Interest Deduction is generally available to any homebuyer, regardless of income, who has a secured mortgage and itemizes their deductions on the Schedule A

b. You may only deduct mortgage interest on up to $750,000 of qualified mortgage debt incurred to buy or improve a first or second residence.

c. You may qualify for the Mortgage Interest Credit if your state or local Housing Finance Agency issued you a qualified Mortgage Credit Certificate when you purchased your main home with a mortgage.

d. You may be able to claim both the Home Mortgage Interest Deduction and the Mortgage Interest Credit, but you will have to reduce the amount of your deduction by the amount of the credit.

e. All of the above

3- On July 18, 2019, John Jones purchases $2,000,000 of equipment (7-year property) for use in her business. It is his only purchase of business property in 2019. John has taxable income from her business of $2 million before any cost recovery. Assuming John does not elect 179 and elects out of bonus depreciation, calculate his total 2019 cost recovery. (show your calculation)