QUESTION 16 Palmer, a successful medical examiner with an annual income of $300,000, also enjoys raising and training quarter horses. He generally spends 5 to 6 hours each week training showing or racing the horses. Over the last 4 years, his winnings from shows and races have amounted to $16,000. Over that same period, he has generated an additional 58,000 of income from stud fees and the sale of colts. Often Palmer uses the horses to take his family or friends riding. In addition, Palmer often participates in equestrian clinics and demonstrations for 4-H Clubs and other similar groups. Palmer employs a high school student to feed the horses each day and clean the stalls weekly. Palmer also hired a professional horse trainer for 4 hours each week to help him train the horses. Which factor(s) below support the position that the activity is a hobby? a. He has hired professional help. ob. He has income from the activity O c. The time spent in the activity is continuous and regular. d. Time spent riding with family. e. None of the above all of the above support the position that the activity is a business. QUESTION 17 In Y1. Nick, a calendar year taxpayer, decided to move his insurance business into another office building. She purchased a used building for $700,000 (excluding the land 3/15/41 (after 1993). Nick also purchased new office furniture for the building. The furniture was acquired for $200,000 on 5/1/41. Nick did not elect 5179 or bonus depreciation. What is Nick's depreciation deduction for Y1 and Y2? Oa. 42,811; 566,928 O b. $46,171, 571,205 OC $48,733: $74,432 O d. $54,231; 581,948