1. Han is a self-employed carpenter and his wife, Christine, works full time as a grade school teacher. Han paid $525 for carpentry tools and supplies, and Christine paid $3,600 as her share of health insurance premiums (not with pretax dollars) for Han and herself in a qualified plan provided by the school district (not through an exchange). Which of the following is a true statement?

1. The tools and supplies are an itemized deduction but the health insurance is deductible for AGI.
2. The tools and supplies are deductible for AGI while the health insurance is an itemized deduction.
3. Both expenditures are deductible for AGI.
4. Neither of the expenditures is deductible.
5. Both expenditures are itemized deductions.

2. Which of the following is a true statement?

1. Congress allows self-employed taxpayers to deduct the employer portion of their selfemployment tax.
2. To deduct expenses associated with any profit-motivated activity, taxpayers must maintain a

high level of involvement or effort in the activity throughout the year.

3. Business activities never require a relatively high level of involvement or effort from the

taxpayer.

4. All business expenses are deducted for AGI.
5. All of these choices are correct

3. Max, a single taxpayer, has a $270,000 loss from his sole proprietorship in 2021. How much of this loss is not deductible after considering the excess business loss rules?

1. $270,000
2. $262,000
3. $8,000
4. $0
5. None of the choices are correct

4. Which of the following is a true statement?

1. Individuals qualify for the moving expense deduction only if they change employers.
2. Individuals qualify for the moving expense deduction if their employer does not pay for the

moving expenses.

3. Moving expenses are deductible from AGI.
4. Moving expenses are generally not deductible.