True / False Indicate whether the statement is true or false. 1. Meg's employer carries insurance on its employees that will pay an employee his or her regular salary while the employee is away from work due to illness. The premiums for Meg's coverage were $1,800. Meg was absent from work for two months as a result of a kidney infection. Her employer's insurance company paid Meg's regular salary of $8,000 while she was away from work. Meg also collected $2,000 on a wage continuation policy she had purchased. Meg must include $11,800 in her gross income. a. True b. False 2. The earnings from a qualified state tuition program account are deferred from taxation until they are used for qualified higher education expenses. At that time, the amount taken from the fund must be included in the gross income of the person who contributed to the account, unless they are used to pay for qualified higher education expenses. a. True b. False 3. Section 212 expenses that are related to rent and royalty income are deductions for AGI. a. True b. False 4. An expense needs to be recurring in order to be "ordinary." a. True b. False 5. If a taxpayer can show that they earned a profit in three-out-of-five previous years, then expenses will never be considered hobby loss and losses from the activity can be deducted in excess of the gross income from the activity. a. True b. False 6. Investigation of a business unrelated to one's present business never results in a current period deduction of the entire amount if the amount of the investigation expenses exceeds $5,000, a. True b. False