QUESTION 1 Melissa has a second home that she uses as a vacation home. She rents out the home part of the time when she is not there. The breakdown is as follows: used personally for 9 days, rented out for 91 days, and left vacant for 265 days. Melissa had the following expenses associated with her second home: Mortgage Interest: $5,000 Utilities: $1,000 Repairs: $4,000 Taxes: $3,000 How much of these expenses can Melissa allocate to rental (for AGI) expenses? QUESTION 2 Bruce, who is single, had the following items for the current year: Salary of $85,000 Loss of $75,000 on the sale of $ 1244 stock acquired three years earlier. Determine Bruce's AGI for the current year. . 527,000 $32,000 $10,000 585,000 QUESTION 3 Raelene runs a small business. For 2020 she has business income of 2,300,000. During 2020, she purchased 2,910,000 of 5 year asset equipment. She elects to take the full $179 deduction, but she elects not to take any additional first-year (Bonus) depreciation. What is Raelene's cost recovery deduction (5179 plus MACRS) for 2020 in relation to these assets? Round your answer to the nearest dollar, and assume half-year convention, QUESTION 4 Two years ago, Gina loaned Tom $50,000. Tom signed a note the terms of which called for monthly payments of $2,000 plus 6% interest on the outstanding balance. Last year, when the balance owing on the loan was $18,000, Tom defaulted on the note. As of the end of last year, there appeared to be no reasonable prospect of Gina recovering the $18,000. As a consequence, Gina claimed the $18,000 as a nonbusiness bad debt. Last year, Gina had AGI of $50,000, which included $16,000 of net long-term capital gains. Gina did not itemize her deductions. During the current year, Tom paid Gina $13,000 in final settlement of the loan. How should Gina account for the payment in the current year? Report $5,000 of income for the current year. Report $2,000 of income for the current year. . Report $13,000 of income for the current year. . Report $18,000 of income for the current year. QUESTIONS Megan operates a business and is taxed as a sole proprietor. For the year, the business reports revenue and expenses of $325,000 and $684,000, respectively. Assuming that Megan has enough other income to offset the entire business loss, what is Tim's net operating loss (NOL) for the year? QUESTION 6 A hurricane destroys Kirk's boat in 2020. The boat is worth $40,000, and Kirk paid $30,000 for the boat two years ago. The boat is a personal use asset. Kirk's AGI for 2020 is 40,000. Answer the following unrelated situations: a. What is the casualty deduction that Kirk can take in 2020? b. Assume that the boat was destroyed in an area that is declared a federal disaster area. What is the casualty deduction Kirk can take in 20207 c. Assume that the insurance company pays Kirk $35,000 in 2020 to cover the loss of the boat, and that the area is a declared federal disaster area. What is the casualty deduction Kirk can take in 2020? TTT Aral . (17 T QUESTION 1 Melissa has a second home that she uses as a vacation home. She rents out the home part of the time when she is not there. The breakdown is as follows: used personally for 9 days, rented out for 91 days, and left vacant for 265 days. Melissa had the following expenses associated with her second home: Mortgage Interest: $5,000 Utilities: $1,000 Repairs: $4,000 Taxes: $3,000 How much of these expenses can Melissa allocate to rental (for AGI) expenses? QUESTION 2 Bruce, who is single, had the following items for the current year: Salary of $85,000 Loss of $75,000 on the sale of $ 1244 stock acquired three years earlier. Determine Bruce's AGI for the current year. . 527,000 $32,000 $10,000 585,000 QUESTION 3 Raelene runs a small business. For 2020 she has business income of 2,300,000. During 2020, she purchased 2,910,000 of 5 year asset equipment. She elects to take the full $179 deduction, but she elects not to take any additional first-year (Bonus) depreciation. What is Raelene's cost recovery deduction (5179 plus MACRS) for 2020 in relation to these assets? Round your answer to the nearest dollar, and assume half-year convention, QUESTION 4 Two years ago, Gina loaned Tom $50,000. Tom signed a note the terms of which called for monthly payments of $2,000 plus 6% interest on the outstanding balance. Last year, when the balance owing on the loan was $18,000, Tom defaulted on the note. As of the end of last year, there appeared to be no reasonable prospect of Gina recovering the $18,000. As a consequence, Gina claimed the $18,000 as a nonbusiness bad debt. Last year, Gina had AGI of $50,000, which included $16,000 of net long-term capital gains. Gina did not itemize her deductions. During the current year, Tom paid Gina $13,000 in final settlement of the loan. How should Gina account for the payment in the current year? Report $5,000 of income for the current year. Report $2,000 of income for the current year. . Report $13,000 of income for the current year. . Report $18,000 of income for the current year. QUESTIONS Megan operates a business and is taxed as a sole proprietor. For the year, the business reports revenue and expenses of $325,000 and $684,000, respectively. Assuming that Megan has enough other income to offset the entire business loss, what is Tim's net operating loss (NOL) for the year? QUESTION 6 A hurricane destroys Kirk's boat in 2020. The boat is worth $40,000, and Kirk paid $30,000 for the boat two years ago. The boat is a personal use asset. Kirk's AGI for 2020 is 40,000. Answer the following unrelated situations: a. What is the casualty deduction that Kirk can take in 2020? b. Assume that the boat was destroyed in an area that is declared a federal disaster area. What is the casualty deduction Kirk can take in 20207 c. Assume that the insurance company pays Kirk $35,000 in 2020 to cover the loss of the boat, and that the area is a declared federal disaster area. What is the casualty deduction Kirk can take in 2020? TTT Aral . (17 T