Question 39 of 40.

In the case study from Chapter 8, what is Michelle's net profit (loss) on Schedule C, line 29?

($858)

($311)

$547

$858

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Question 40 of 40.

In the case study from Chapter 8, why isn't Raphael allowed to deduct any of his passive losses from Schedule K-1 (Form 1065)?

He earned too much money in 2020.

His Alternative Minimum Tax (AMT) was added back in.

Raphael's net business loss was added to the passive losses.

He had no ordinary passive income to offset the passive losses.

Question 2 of 40.

Louise purchased her primary residence for $240,000. As part of the closing procedure, she paid $2,300 in a loan origination fee, $750 to a lawyer to review the purchase contract and other closing papers, $150 for a property survey, and $800 for title insurance. She also gave the real estate agent a $75 gift basket in appreciation for his hard work.

What is Louise's basis in the residence?

$244,075

$244,000

$241,700

$240,950

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