I. an return? if so, would the item be deductible for or from AGI? Explain each item. Loss on sale of car used for personal purposes. b. Payment ofa speeding fine related to business. I Hobby expenditures The taxpayer had hobby revenue in excess of $2,000. e. Interest of $5,000 on money used to purchase tax-exempt securities. l. regular for the following qualified assets. Ignore bonus depreciation and l. Business equipment purchased in February for $40,000 which has a salvage value of $4,000. b. in May for $22,000 which has a salvage value of $3,000. Compute regular depreciation for the following new assets (consider bonus depreciation, but I ignore Section 179). Business equipment purchased in May for $150,000 hih has a salvage value of $15,000. d. Business car purchased in April for $42,000 whith a salvage of $5,000. e. Compute depreciation for residential real estate purchased in January for $390,000 with a salvage value of $50,000. 3. This year Joan drove he car 10,000 miles for business purposes and incurred $200 in parking fees, $400 in highway tolls, and $700 for car insurance. Compute Joan's deduction for car expenses on her income tax return, assuming she elects to use the standard mileage allowance method to compute her car expenses. Joan is self- employed. 4. This year Joan converted he principal residence to rental property. She bought the home eight years ago for $500,000. She had it appraised for $402,000 when she placed it on the rental market. $12,000 of the value of the home is attributable to the value of the land on which the home is located. Ifthe house was converted on June 30th of the year, how much depreciation Joan Claim this year? 5. In the current year, John's accounting office was partially destroyed by fire. His adjusted basis the building was $300,000 and the decline in fair value was $200,000. Insurance proceeds amounted to $160,000. What is John' basis in the building? 6. During the current year, Jane, a married taxpayer who files a joint return, reports the followin items of income and loss: AGI consisting of salary income of $130,000 and rental real-estate of $40,000. Jane actively participates in the management of the rental property. Determine Janes AGi for the current year. What would be your answer if her salary were $400,000? Answer any five problems. Show all calculations. Explain all answers