Why is the distinction between deductions for AGI and deductions from AGI important for individuals?
QI:6-2
Sam owns a small house that he rents out to students attending the local university. Are the expenses associated with the rental unit deductions for or from AGI?
QI:6-3
During the year, Sara sold a capital asset at a loss of $2,000. She had held the asset as an investment. This is the only capital asset she sold during the year. Is her deduction for this capital loss a deduction for or a deduction from AGI?
QI:6-4
Jake is a single, self-employed individual who owns his own business. During 2016 JakeJake reported $240,000 gross income and $75,000 expenses from his business. He also paid $28,000 in alimony to his former spouse, $4,600 mortgage interest on his personal home, $7,500 for health insurance premiums, and $2,400 for medicine and doctors. Ignoring any self-employment tax on the business income, what is Jake's AGI for 2016?
QI:6-7
If an activity does not generate a profit in three out of five consecutive years, is it automatically deemed to be a hobby? Why or why not?
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