2. This question is worth 20 points Matt is single, age 25 and has salary from his job as a sports announcer in the amount Matt also has the following income and expenses related to an activity Income Mortgage interest - from his home office Property taxes from his home office Depreciation Supplies and fees Telcphone $23,000 8,000 2,000 5,000 8,000 2,000 2.List 4 factors 3. If a hobby, answer the following questions might be used to assist a taxpayer in determining whether an activity is a hobby or a business? a. Are hobby expenses deductions FOR AGI or FROM AGI? b. What form/schedule and line is hobby income reported on? Attac h a copy of the form/schedule to your answer and highlight the line. c. What form/schedule and line are hobby expenses reported on? Attach a copy of the form/schedule to your answer and highlight the line. d. Calculate Matt's AGI c. What is the rale regarding how hobby expenscs are deducted, including the ordering of expenses and all limitations? expenses are calculated AND provide a (follow the formula that we used in the hw problems). 4. If a business, answer the following questions: f. Apply the rule in (e) above and prepare a detailed schedule of your calculation of deductible hobby a. Are business expense deductions FOR AGI or FROM AGI? b. What form/schedule is business income reported on? c. What form/schedule are business expenses reported on? d. Prepare a tax return for Matt, assuming he uses the standard deduction and has no dependents This question is worth 15 points. During the year, Evan rented his vacation home for 90 days and spent 60 days there. Gross rental income from the property was $5,000. Evan incurred the following expenses: mortgage interest, $2,000; real estate taxes, $2,500; utilities, $1,000; maintenance, $300; and depreciation, $5,000 3. 1. Identify how this vacation home is treated and how you came to your conclusion (state the rule and apply th facts to the rule). 2. Compute Evan's allowable deductions for the vacation home using the IRS's approach. 3. What schedule does Evan report rental income and expenses on? 4. Prepare the schedule using the figures above and attach it to your answer 5. Which personal expenses are deductible? Your answer should include: how thesc expenses classified (for AGI, from AGI - what form/schedule) and the amount of the deduction