Anibal Cruz operates a sole proprietorship. He also owns and rents an apartment building. In 2022, Anibal had the following income and expenses:

Interest income from qualified bonds $10,000

Dividend income from qualified stock $10,000

Income from business $90,000

Expenses for business

Salaries $34,000

Other qualified expenses $12,000

Income from rental studio for university student $12,000

Expenses for rental studio

Real estates $2,400

Maintenance $2,200

Other ordinary and necessary expenses $2,350

Instructions

1. Determine the net income of the self-employed business 5 points.

2. Determine the net income from the studio rental activity 5 points.

3. Anibal has no dependents, he lives with his wife Hanna who is the same age as him, and has no itemized deductions, you are 66 years old, please determine Anibal's adjusted gross income, and the amount you must pay him IRS for tax year 2022.

Remember to present your procedure to arrive at your respective results 15 points.