Use the RIA Checkpoint database to answer the following questions. Cut and paste the relevant Internal Revenue Code and Regulation section(s) into your solution and explain how the authority answers the tax issue in question. Give the most specific citation applicable [e.g., Section 168 (a) (1)] to the question. NOTE: If the answer can be found in both the code and regulations you must provide both authorities.

1. Sally is a teacher. In her spare time, she enjoys painting watercolors. Occasionally she sells one of her paintings. Last year, Sally spent $800 on paint supplies and received $1,000 from the sale of her paintings. What code section and/or regulation allows Sally to deduct some of the expenses from her hobby?

2. Jerry, a salesman, sends his five best clients gift baskets on their birthdays. The gift baskets cost Jerry $50 each. What code section and/or regulation allows Jerry to deduct $25 of the price of each gift?

3. Marvin’s house is damaged by a tornado. What code section and/or regulation allows an individual to deduct a loss due to a tornado?

4. Peter undergoes a medical procedure to prevent him from snoring. His insurance company will not reimburse him for the $2,000 procedure since he does not suffer from sleep apnea and the company contends that the procedure is cosmetic surgery. What code section and/or regulation does not allow him to deduct the cost of the procedure if the medical procedure is considered cosmetic surgery?