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1. Richard owns and manages an apartment building. This is Richard's only passive activity. The building generated a loss of $21,000 for the current year. Before deduction of the loss, Richard's AGI was $79,000. Can Richard deduct the entire loss in the current year? If Richard cannot deduct the full amount of the loss, indicate the amount he can take and how much loss he can carry forward.
2. What are the three primary sources of federal tax law? Describe each of them. Which of these sources do you think is the most authoritative? Why?
3. If you worked for a company, would you want to be treated as an employee or an independent contractor?why?
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