John Baron, a professional baseball player, raises Black Angus cattle under circumstances that would 72. indicate that the activity is a hobby. His adjusted gross income for the year is $50,000, and he has $500 of other miscellaneous itemized deductions, all of which are subject to the two-percent floor. During the taxable year, he paid $300 in state taxes on real property used in the cattle operation. Feed for the cattle cost $1,500. The income from the sale of cattle was $1,400. (a.) Under the hobby loss rule, to what extent is the expense of $1,500 deductible? (b.) Under the two-percent-of-adjusted-gross-income limitation, how much is the overall deductible amount of his itemized deductions?
73. in 2010. A breakdown of Bob’s and Alice’s income and deductions is as follows:Business Income$50,000$44,000Business Deductions63,00050,000Nonbusiness Income16,00022,000Nonbusiness Deductions14,00027,000Determine Bob’s and Alice’s NOL for 2010.You own a building that you constructed on leased land. You use half of the building for your business and 74. you live in the other half. The cost of the building was $400,000. You made no further improvements or additions to it.A fire in March damaged the entire building. The FMV of the building was $380,000 immediately before the fire and $320,000 afterwards. Your insurance company reimbursed you $40,000 for the fire damage. Depreciation on the business part of the building before the fire totaled $24,000. How much is your deductible business casualty loss in 2010?