1.A change in the amount of a taxpayers AGI will not affect the amount of medical expense deduction that is allowed.

Group of answer choices

True

False

2.

Bob and April own a house at the beach. The house was rented to unrelated parties for 8 weeks during the year. April and the children used the house 12 days for their vacation during the year. After properly dividing the expenses between rental and personal use, it was determined that a loss was incurred as follows:

Gross rental income		$4,000
Less: Mortgage interest & property taxes	$3,500
Other allocated expenses	2,000	(5,500)
Net rental loss		($1,500)

What is the correct treatment of the rental income and expenses on Bob & April's joint income tax return for the current year?

Group of answer choices

Only the mortgage interest and property taxes should be deducted

Since the house was used less than 50% personally by Bob and April, all expenses allocated to personal use may be deducted

Bob and April should include none of the income or expenses related to the beach house in their current year income tax return

A $1,500 loss should be reported

3.

Beverly, a real estate broker, had the following income and expenses in her business:

Commission income	$160,000
Expenses:
Bribes paid to city officials (illegal under state law)	30,000
Referral fees paid (not illegal)	11,000
Travel and transportation	6,000
Supplies	5,000
Office and phone	4,000
Parking tickets/fines	1,500
How much net income must Beverly report from her business?

Group of answer choices

$134,000

$102,500

$132,500

$104,000