On January $1,$ year one, Ann borrows $$80,000$ and uses the proceeds of the loan, together with $$20,000$ of her own money, to open a bicycle shop. The loan is recourse and Ann does not materially participate in the management of the shop. In year one the bicycle shop shows a net loss on operations of $$30,000.$ In each of the following situations state the amount of loss that Ann may deduct and the year in which Ann may deduct the loss.

$1.$ Ann has no other investments.

$2.$ Ann receives $$20,000$ of dividends from stock.

$3.$ Ann also owns a restaurant and works there full time. Her year one taxable income from the restaurant is $$30,000.$

$4.$ Ann also owns a restaurant and does not materially participate in the restaurant. Her year one taxable income from the restaurant is $$30,000.$

$5.$ Ann also owns a restaurant but does not materially participate in the management of the restaurant. In the year before year one, Ann$$s taxable income from the restaurant is $$30,000.$ In year one the restaurant has no taxable income.

$6.$ Ann also owns a restaurant but does not materially participate in the management of the restaurant. In year one the restaurant has no taxable income. In year two Ann$$s taxable income from the restaurant is $$40,000,$ and the bicycle shop has zero income or loss.

$7.$ Ann sells the bicycle shop for $$130,000$ on December $31,$ year one.