Reference no: EM133234186

1. What are the seven tests that help to establish material participation?

2.Darian Basemore owned an interest in five businesses in 2021. His level of participation and percentage of ownership in each enterprise is as follows

Activity Hours of Participation Ownership Percentage
Ven-Tale 180 22%
MovERent 88 17
AZ Airlines 950 33
Sadd Books 135 12
Kingdom Autos 185 25

In which activity, if any, will Darian be considered a material participant?

3. . Problem 24 at the end of Chapter 8 after the questions section

Hospital Costs $3,200
Doctor's Bills 1,600
Medicine and Drugs 800
Hospitalization insurance premiums 4,000
In addition, they incurred the following medical expenses for Tom's mother who is totally dependent upon and lives with Tom and Shannon:

Cosmetic Surgery (face-lift operation) $5,400
Doctor's Bills 2,600
Medicine and Drugs 1,000
They live 10 miles from the medical center and made 20 trips there for doctor office visits and hospital stays this year. Tom and Shannon's adjusted gross income is $85,000. What is Tom and Shannon's medical expense deduction for this year?

4. In 2021, Sally Morris, a single taxpayer, pays $3,000 of interest on qualified student loans. Her AGI is $40,000. What is her qualified student loan interest deduction in 2021?

5. The interest paid on Josephine Young's personal residence for the year 2021 totals $4,800; the interest paid on her personal credit card is $80; the interest paid on a note to the National Bank (¾ of which was used to buy state and municipal bonds, the rest to buy stock) is $1,000. If she has interest income of $2,000, what is Josephine's total interest deduction for the year?