Question 1: (Please explain your answer) (Please note all questions are for USA Federal Income Taxation)

John, a salesman employed by an fashion retailer, is considering opening a pizzaria. If John decides to acquire the pizzaria, any investigation expenses are:

A.

None of these.

B.

Above-the-line deductions

C.

Deductible up to $5,000 in the current year with the balance being amortized over a 180-month period.

D.

Not deductible

E.

Itemized deductions

Question 2: (Please explain your answer) (Please note all questions are for USA Federal Income Taxation)

Even if it does not meet the definition of a casualty loss, an individual may deduct a loss on personal-use property

True or False

Question 3: (Please explain your answer) (Please note all questions are for USA Federal Income Taxation)

All of the following statements are false, except:

A.

A vacation home at the beach that is rented for 200 days and used personally for 16 days is classified in the primarily rental use category.

B.

If a vacation home is classified as primarily for personal use (i.e., rented for fewer than 15 days), none of the maintenance and utility expenses can be allocated and deducted as a rental expense.

C.

The portion of property tax on a vacation home that is attributable to personal use is a deduction from AGI.

D.

If a vacation home is classified as primarily rental use, the only expenses that can be deducted are mortgage interest and property taxes.

E.

All of these statements are false.