Scenario 22-1 Esteban and Michaela Own an Apartment Building. They Hire Nico

question 444

Multiple Choice

Scenario 22-1
Esteban and Michaela own an apartment building. They hire Nico to manage the building and deal with tenants' complaints. They also hire Ted to make any necessary repairs to the apartments or the common area and they hire Rex to be the door guard at night.
-Refer to Scenario 22-1. Which of the following statements is correct?

• A)If Rex falls asleep while he is supposed to be guarding the door, he has created an adverse selection problem.
• B)Esteban and Michaela are the principals and Nico, Ted, and Rex are the agents.
• C)Nico is the principal and Ted and Rex are the agents.
• D)All of the above are correct.

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Definitions:

Modified AGI

An adjustment to Adjusted Gross Income (AGI) for specific items, affecting eligibility for certain tax benefits.

Qualified Expenses

These are specific expenses that meet criteria set by tax laws or other regulations for eligibility for tax benefits or deductions.

Finalized

To complete all required procedures to make a document or transaction officially valid and binding.

Child Tax Credit

A tax credit offered by the government which reduces tax liability for taxpayers with dependent children.