41. Adrianka reports the following income and loss in the current year.

Salary	$ 72,000
Income from activity A	20,000
Loss from activity B	( 10,000)
Loss from activity C	( 15,000)

All three activities are passive activities with respect to Adrianka. Adrianka also has $16,000 of suspended losses attributable to activity B carried over from prior years. During the year, Adrianka sells activity B and realizes a $14,000 taxable gain. What is Adrianka's AGI as a result of these transactions?

A) $50,000

B) $58,000

C) $65,000

D) $77,000

42. An individual is considered to materially participate in an activity if any of the following tests are met with the exception of

A) the individual participates in the activity for more than 500 hours during the year.

B) the individual has materially participated in the activity in any five years during the immediate preceding 10 taxable years.

C) the individual's participation in the activity for the year constitutes substantially all of the participation in the activity by all individuals.

D) the individual participates in the activity for 80 hours during the year, and that participation is more than any other individual's participation for the year.

43. Last year, Ahdia loaned her friend, Steve, $10,000. Although Steve had signed a note payable that contained interest payments and a maturity date, the loan had not been repaid this year when Steve died insolvent. For this year, assuming that the loan was bona fide, Ahdia should account for nonpayment of the loan as a(n)

A) itemized deduction.

B) ordinary loss.

C) short-term capital loss.

D) long-term capital loss.