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He is so much fun/funny to be with that I cannot concentrate on my work. Which would be correct in this sentence fun or funny?
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Fun.

Actually, "fun" and "funny" don't mean the same thing at all, even ignoring the fact that "fun" is (officially) a noun and funny is an adjective. "Fun" is - in theory - an abstract noun describing a concept which is something like enjoyment or happiness. (It doesn't imply laughter). "Funny" is an adjective meaning "having humor", or "which makes me laugh".

Modern usage of "fun" allows it also to be used as an adjective. (For example, "It was a fun party"). This usage has come about precisely BECAUSE "funny" is just not the right word - "a fun party" is not the same thing as "a funny party". However - don't use "fun" as an adjective in an English exam. Your examiner will mark it wrong!

Comparative and superlative forms of "fun" as an adjective ("funner", "funnest") currently are used only in America. I predict that these words will wend their way across the Atlantic and become part of British English in due course, but it hasn't happened yet.

Rommie
Let me put it another way. Would "he is so much fun to be with" be marked wrong in an exam?
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No, it's absolutely fine.

Rommie

PS. Unless, that is, your examiner is really old-school and doesn't like sentences which end with a preposition. (I don't know if that rule is still used in schools or not. I suspect probably not). But if it is, replace with any of:

1. To be with him is so much fun
2. It is so much fun to be with him

You can also replace "to be with" with "being with" fairly harmlessly. In fact, "being with" is probably better, as it refers to the ACT of being with him, not merely the CONCEPT.
Thank you so much for your comments but unfortunately the last example you suggested would not be appropriate for the context where I would use it. Thanks anyway. Cheers
funner/funnest OR funnier/funniest?
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In Britain, "funner" and "funnest" have not really entered the vocabulary. They wouldn't be widely understood. You should also not use them in an exam, or in formal writing. I believe these words are quite acceptable in America, however.

Notwithstanding the above, "funner" would mean "more fun", wheras "funnier" would mean "more funny". Similarly with the -est words. It depends on what you want to say - and, in this particular case it also depends on what country you want to say it in.

Rommie