1. Define each of the following with respect to unrelated debt-financed property.
a. Debt-financed income.
b. Debt-financed property.
c. Acquisition indebtedness.
d. Average acquisition indebtedness.
e. Average adjusted basis.
2. Tom is the treasurer of the City Garden Club, a new entity in the community. A friend who is the treasurer of the garden club in a neighboring community tells Tom that it is not necessary for City Garden Club to file a request for exempt status with the IRS. Has Tom received correct advice? Explain.