Mr$.$ Monk is a self$-$employed computer consultant who earns more than $$100,000$ each year. He also is an enthusiastic artist. This year, he spent $$4,900$ on oil paints, canvasses, supplies, and lessons at a local studio. Mr$.$ Monk made several trips to the National Gallery in Washington, D$.$C$.,$ to attend lectures on painting technique. His total travel costs were $$3,350.$ Assume the taxable year is $2024.$

Required:

Compute the effect of Mr$.$ Monk$$s painting revenue and expenses on his AGI assuming Mr$.$ Monk earned $$13,290$ from sales of his paintings. This was the sixth consecutive year that the painting activity generated a profit.

Compute the effect of Mr$.$ Monk$$s painting revenue and expenses on his AGI assuming Mr$.$ Monk earned $$2,000$ from sales of his paintings. The painting activity has never generated a profit.

Compute the effect of Mr$.$ Monk$$s painting revenue and expenses on his AGI assuming Mr$.$ Monk earned $$2,000$ from sales of his paintings. The painting activity also generated a net loss four years ago but was profitable in each of the past three years.

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Item $25$

Problem $17-25($Static$)[$LO $17-5]$

Mr$.$ and Mrs$.$ Marcum live in southern California in an area devastated by wildfires that the President designated a federally declared disaster. Because of fire damage, the Marcums had to replace the roof of their home at a cost of $$55,000.$ Their homeowners insurance reimbursed them for only $$32,500$ of the cost. The Marcums$$ $$22,500$ unreimbursed loss was their only casualty loss this year. Assume the taxable year is $2024.$

Required:

Compute their deductible casualty loss if their AGI is $$163,000.$ Assume that the fire that damaged the Marcums' roof was attributable to faulty electrical wiring in their attic?