Question 3 of 40.

Rheal purchased a truck for his business. The purchase price was $28,500 for the truck, and he paid $120 for fees to title the truck. The manufacturer was offering a $2,000 rebate, which Rheal received.

What is his basis in the truck?

$26,500

$26,620

$28,500

$28,620

For the "kiddie tax" rule to apply, the child must __________.

Have less than $2,200 in investment income.

Have enough earned income to pay over 50% of their own support.

Have at least one living parent.

Not have attained age 23 in the tax yea

Question 12 of 40.

Diane is a self-employed graphic designer with a qualified in-home office. The office is 350 square feet; the whole house is 2,250 square feet. Her mortgage is $1,500/month, but she doesn't have all her other expenses available. If she decides to use the simplified method, what would her home office deduction be?

$1,500

$1,650

$1,950

$2,801

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.

What is the correct order in which the limitations on potential losses must be applied for 2020?

First, at-risk; second, basis; third, excess business loss; fourth, passive activity.

First, passive activity; second, excess business loss; third, basis; fourth, at-risk.

First, basis; second, passive activity; third, excess business loss; fourth, at-risk.

First, basis; second, at-risk; third, passive activity; fourth, excess business loss.