1.Edward is single. His modified adjusted gross income of $241,000 includes: wages of $209,000, $1,500 of interest, $7,500 of tax-exempt interest, $3,000 of dividends, $2,500 of rental income and $25,000 of capital gains. He has no other investment income and none of the income is from a trade or business. Edward will calculate his net investment income tax on __________.

A. $29,500

B. $32,000

C. $39,500

D. $241,000

2.Choose the response that best completes the following sentence. A taxpayer may be treated as actively participating in a rental real estate activity when they own at least 10% of the property and:

A. Make management decisions in a significant and bona fide sense.

B. Ratify decisions made by a property manager or management company.

C. Spend more than half their time across all trades or businesses in real estate activities.

D. Spend more than 750 hours in real estate activities.

3.Virtual currency used for investment purposes is treated as ____________.

A. A capital asset.

B. A type of currency that can generate a foreign currency gain or loss under Section 988 of the Internal Revenue Code.

C. Ordinary income subject to the same rules that apply to barter transactions.

D. Taxable income reported on the Other income line on Form 1040, Schedule 1.