Author Question: For the years 2012 through 2016 (inclusive) Mary, a best-selling author, has been involved in ... (Read 76 times)

mp14 · **on:** Sep 13, 2020

Question 1

Erin, Sarah, and Timmy are equal partners in EST Partnership. Sarah also owns 40% of Elton Corporation. The remaining shareholders of Elton Corporation are: Erin (24%) and Sarah's uncle (36%). What percent ownership does Sarah directly or constructively own in Elton Corporation?
◦ 40%
◦ 64%
◦ 76%
◦ 100%

Question 2

For the years 2012 through 2016 (inclusive) Mary, a best-selling author, has been involved in operating an antique store. In 2012, 2013 and 2014 her revenue exceeded the expenses from the activity. In 2015 and 2016, the antique store generated a loss. Which statement is correct?
◦ The activity is a business. The IRS cannot prove it is a hobby.
◦ The activity is a hobby. Mary cannot prove it is a business.
◦ The activity is presumed to be a business. However, the IRS may prove it is a hobby.
◦ The activity is presumed to be a hobby. However, Mary may prove it is a business.

zogaridan · **Reply #1 on:** Sep 13, 2020

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