Which of the following does NOT qualify as a dwelling unit?

a. House.

b. Pontoon boat with neither kitchen nor restroom.

c. Mobile home.

d. Sailboat with kitchen and restroom.

10. Joey bought his home in 2012 for $250,000, and used it as his principal residence until he sold it in 2018 for $140,000. What recognized gain or loss does Joey include in his 2018 taxable income?

a. $110,000 recognized loss.

b. Neither gain nor loss.

c. $110,000 recognized gain.

d. $140,000 recognized gain.

11. Fred and Ethel file a joint return for 2018. Fred bought his home in 2014 for $300,000 and has used it as his principal residence ever since. Ethel moved into Freds home when they married in January, 2017. Fred sold the home September 30, 2018 for $775,000. What is the least recognized gain Fred and Ethel can report on their joint return for 2018?

a. $0.

b. $225,000.

c. $475,000.

d. $775,000.

12. Mickey and Minnie file a joint return for 2018. Mickey bought his home in 2014 for $300,000 and has used it as his principal residence ever since. Minnie moved into Mickeys home when they married in January, 2016. Mickey sold the home September 30, 2018 for $775,000. What is the least recognized gain Mickey and Minnie can report on their joint return for 2018?

a. $0.

b. $225,000.

c. $475,000.

d. $775,000.

13. Paul and Paula file a joint return for 2018. During 2018, they paid $90,000 of interest on their home mortgage interest of $1,500,000. How much of the interest expense can they deduct on their 2018 return?

a. They cannot deduct any mortgage interest.

b. They can deduct $45,000 of the interest if they bought the home (and borrowed the mortgage) on January 1, 2018.

c. They can deduct $30,000 of the interest if they bought the home (and borroded the mortgage) on January 1, 2014.

d. They can deduct all $90,000 of the interest.

14. Red bought his home on March 31, 2018. On November 25, 2018, Red paid the entire $1,200 of real estate tax due on the home for 2018; the previous owner paid none of the real estate tax due for 2018. How much real estate tax can Red deduct for 2018?

a. $0.

b. $300.

c. $900.

d. $1,200.

15. Lester owns home in Nome, Alaska. During June, Lester rented his home out for 10 days to a television crew filming a segment of Race for the Pole. Lester collected $20,000 of rent income for the 10 days, and used $16,000 of the proceeds to go on a 10-day vacation to Tahiti during filming. What is Lesters gross income from this arrangement?

a. $0.

b. $4,000.

c. $16,000.

d. $20,000.