For each of the following situations, determine the deduction concepts involved, and explain how they form the basis for the tax treatment described:
a. Jamie sells her personal residence at a loss of $9,000. She is not allowed a deduction for the loss.
b. Jamie sells a building used in her business at a loss of $9,000. She is allowed to deduct a $9,000 loss on the sale of the building.
c. Last year, Gardner Corporation purchased equipment costing $10,000. The equipment was eligible for a special expense election, and Gardner deducted the $10,000 cost in the year of purchase. Gardner is not allowed a depreciation deduction on the equipment in the current year.
d. The Orlando Jams Partnership borrows $500,000 to use as working capital. During the current year, the partnership pays $45,000 in interest on the loan and repays $100,000 of the loan principal. Orlando can deduct the $45,000 interest payment but cannot deduct the repayment of the loan principal.