Question 15 of 40.

Ronaldo receives a Schedule K-1 from a family business that he does not actively participate in. On it, he shows interest income of $245 and dividends of $681. There is also $275 in annuities. Ronaldo also has a passive loss of $1,721 from another business. Can he offset the loss with the Schedule K-1 income?

No, he cannot offset passive losses using investment income unless there is enough gain to wipe the loss out completely.

Yes, he can offset $926 of the loss using the interest and dividends, but not the annuities.

No, he cannot offset passive losses with portfolio income.

Yes, he can offset $1,201 of the loss using the investment income.

Question 24 of 40.

Nikolaos is an ordained minister. He moved to Indianapolis and lives in the nearby furnished parsonage, which is 1,500 square feet. His previous role was in Washington, D.C.; the fair rental value (FRV) of his parsonage (1,800 square feet) in Washington was $18,000/year.

How should he determine FRV for the Indianapolis parsonage?

Use the same FRV as the Washington, D.C. parsonage.

Reduce the Washington FRV by the size ratio of the new parsonage to the Washington home.

Estimate FRV based on other properties available in the area.

Consult an Indianapolis realtor for a documented quote with comparable listings for the house.

Question 26 of 40.

All of the following types of income received by members of the military are taxable EXCEPT:

Training duty pay earned outside of a combat zone.

Active duty pay earned outside of a combat zone.

Combat pay earned in a combat zone.

Imminent danger pay earned outside of a combat zone.