Question $5($Chapter $9)$

Luke is a self$-$employed attorney. He maintains an office in his home that is exclusively dedicated to his work. The office occupies $230$ square feet, which is $6\%$ of the floor space of the home. Luke incurs the following expenses:

New furniture for the office only $-$ $$400$

Property tax $-$$$5,000$

Utilities $-$ $$4,000$

What is the amount of Luke's home office expense deduction, after considering both the regular and the simplified method? Show your work to receive full credit!

Question $6($Chapter $10)$

Ronnie is considering making the following charitable contributions:

Option $1$: stock held for $6$ years $($basis $$30,000,$ FMV $$32,000)$

Option $2$: stock held for $5$ years $($basis $$32,000,$ FMV $$32,000)$

Option $3$: cash of $$32,000$

Option $4$: stock held for $3$ months $($basis $$32,000,$ FMV $$45,000)$

$($a$)$ What would be the worst option for Ronnie to choose for the charitable contribution? Please circle the correct response.

Option $1$

Option $2$

Option $3$

Option $4$

$($b$)$ What would be the best option for Ronnie to choose for the charitable contribution? Please circle the correct response.

Option $1$

Option $2$

Option $3$

Option $4$

$4$

Question $7($Chapter $13)$

Frank exchanges his apartment building $($FMV $$405,000$; AB $$305,000)$ and $$180,000$ cash for Nico's apartment building $($FMV $$585,000$; AB $$600,000).$

$($a$)$ What is Nico's recognized gain?

$($b$)$ What is Frank's realized gain?

$($c$)$ What is Frank's recognized gain?

$($d$)$ What is Frank's basis in the building he receives from Nico?