Question 1: (Please explain your answer) (Please note all questions are for USA Federal Income Taxation)

In connection to the investigation of a business, which of the following are true?

A.

Expenses may be deducted immediately by a taxpayer engaged in a different trade or business regardless of whether the business being investigated is acquired.

B.

The expenses must be capitalized and amortized regardless of whether the taxpayer is already engaged in the trade or business.

C.

For any investigation expense to ever to be deductible, the business must be related to the taxpayer's present business

D.

None of these

E.

The expenses incurred are still deductible if the taxpayer is not already engaged in the trade or business and if the project is abandoned.

Question 2: (Please explain your answer) (Please note all questions are for USA Federal Income Taxation)

Purchased goodwill must be capitalized, but can be amortized over 180-month period.

True or False

Question 3: (Please explain your answer) (Please note all questions are for USA Federal Income Taxation)

A property must have been owned by a taxpayer as the principal residence for at least two years during the five-year period ending on the date of the sale and used by the taxpayer for all five years preceding the date of the sale in order to qualify for the 121 exclusion

True or False

Question 4: (Please explain your answer) (Please note all questions are for USA Federal Income Taxation)

Tim was involved in an car accident in 2021. His car was used 70% for business and 30% for personal use. The car had originally cost $50,000. At the time of the accident, the car was worth $30,000 and Tim had taken $7,000 of depreciation. The car was totally destroyed and Tim had let his car insurance expire. If his AGI is $60,000 (before considering the loss), calculate his AGI.