True/False (2 points each x 13-26 points) - Allocate 20 minutes for this section. Iudicate whether the sentence or statement is true or false on the Scantron Form provided (a is TRUE, b is FALSE). 14. A self-employed taxpayer drove his car 10,000 miles and incurred $100 in business parking and tolls. If he uses the automatic mileage method to compute auto expenses in 2018, his total deduction will be $5,800 (S.58 per mile). 15. Losses generated by passive activities can be deducted only to the extent of income from all of the taxpayer's passive activities. Any unused passive losses are suspended and carried forward to future years to offset passive income in those years. 16. In the current year, Kenny has a $35,000 loss from a real estate rental activity. If Kenny is a material participant, he may be able to deduct up to $30,000 of the loss, depending on his AGL. 17. The professor has a friend who lives in Maui. He purchased a building lot, sold the building lot, and within a short period of time, purchased another property. Section 1031 of the IRC allowed her friend to defer paying taxes on the gain on the sale of the first building lot. 18. Kevin purchased a new business asset on July 23, 2019, at a cost of $26,000. Kevin takes additional first-year depreciation on the asset. Bonus depreciation is 50% of the cost of the asset and totals $13,000. 19. You enjoyed hearing about the Professors real life tax examples in elass this semester! 20. Dylan invested $18,000 in a horse breeding business, in which he materially participates (active income). Dylan's share of the loss for 2018 is $26,000. He can deduct $26,000 on his 2018 tax return. 21. Medical expenses may be deducted on a NJ tax return so long as they exceed 2% of NJ income. 22. Perrin receives stock (worth $11,000) as a gift from his aunt. His aunt's adjusted basis is $7,000. Perrin's basis in the stock is $7,000