1.Chuck is an unmarried individual with an AGI of $79,000 who pays $2,000 of student loan interest.What is the deductible amount of student loan interest?

My answer $ 800 is incorrect.

2000* (79000-70000/85000-70000)=1200

2000-1200=800

2.Julianne is the owner of a motel that produces a loss of $10,000 for the year.The average rental period for rooms in her motel is about three days.Julianne works about 600 hours on motel business during the year.

Which of the statements below reflects the correct treatment of her loss?

Whether Julianne may take the loss or not for the year depends upon whether she qualifies for the special allowance of up to $25,000 for rental real estate with active participation.

options:

A.She can take the loss if her income allows her to take $10,000 of loss under the special allowance from the passive activity loss limitations for rental real estate with active participation.

B.She cannot deduct this loss because she is not a real estate professional.

C.The loss is deductible because this activity is a business rather than rental real estate and she materially participates.