BUSINESS

Question 30

  1. David, a calendar year married taxpayer, files a joint return for 2017.  Information for the year includes the following:
    AGI (including wagering gains)                                                 $371,800
    State income taxes                                                                     15,000
    Charitable contributions                                                               16,000
    Wagering losses (wagering gains were $22,000)                           20,000

    David’s allowable itemized deductions for the year are:

    a.a.       $51,000
    b.
    b.       $29,260

    c.
    c.       $49,260

    d.
    d.       $31,000

    e.
    e.       None of the above.

1 points  

Question 31

  1. The bank forecloses on Lisa’s apartment complex. The property had been pledged as security on a nonrecourse mortgage, whose principal amount at the date of foreclosure is $900,000.  The adjusted basis of the property is $500,000, and the fair market value is $900,000.  What is Lisa’s recognized gain or loss?
    a.a.       0

    b.
    b.       <$500,000>

    c.
    c.       $400,000

    d.
    d.       <$900,000>

    e.
    e.       None of the above.

1 points  

Question 32

  1. Khalid sells two personal use assets during the taxable year.  A gain of $3,000 is realized on the sale of one asset and a loss of $9,000 is realized on the sale of another asset.  What is his recognized gain or loss?
    a.a.       $0

    b.
    b.       <$9,000>

    c.
    c.       $3,000
    d.
    d.       <$6,000>

    e.
    e.       None of the above.

1 points  

Question 33

  1. Gift property (disregarding any adjustment for gift tax paid by the donor):
    a.a.       Has the same basis to the donee as the donors adjusted basis if the donee disposes of the property at a loss, and the fair market value on the date of gift was less than the donor’s adjusted basis.
    b.
    b.       Has no basis to the donee if the fair market value on the date of gift is less than the donor’s adjusted basis.
    c.
    c.       Has no basis to the donee because he or she did not pay anything for the property.

    d.
    d.       Has the same basis to the donee as the donor’s adjusted basis if the donee disposes of the property at a gain.

    e.
    e.       None of the above.

1 points  

Question 34

  1. If a like-kind exchange, if boot received is greater than the realized gain:

    a.a.       No gain or loss is recognized.
    b.
    b.       Loss is recognized to the extent of the excess of the boot received over the realized gain.

    c.
    c.       Gain is recognized to the extent of the realized gain.

    d.
    d.       Gain is recognized to the extent of the boot received.

    e.
    e.       None of the above.

1 points  

Question 35

  1. Which of the following qualify as replacement property under Section 1033 (nonrecognition of gain from an involuntary conversion)? (Taxpayer owns the building)

    1.       An office building occupied by the taxpayer that was destroyed by a fire is replaced with a warehouse which is to be used to store taxpayer’s inventory.
    2.       A shopping center leased to various retail tenants is destroyed by a tornado.  The shopping center is to be replaced with a warehouse which is to be leased to various tenants.
    3.       An office building occupied by the taxpayer is condemned.  The building is to be replaced with a warehouse which is to be leased to various tenants.

    a.a.       1
    b.
    b.       2
    c.
    c.       3
    d.
    d.       1 and 3

    e.
    e.       2 and 3

1 points  

Question 36

  1. Which of the following are capital assets?

    a.a.       Investment property held by a trade or business.

    b.
    b.       Inventory.

    c.
    c.       Certain copyrights, literary or musical compositions held by the person whose efforts created the property.

    d.
    d.       Accounts receivable associated with the sale of inventory.

    e.
    e.       None of the above.

1 points  

Question 37

  1. Bea has the following capital gains and losses this year:

    LTCG           $15,000                                                                                       STCG $15,000
    LTCL            $10,000                                                                                       STCL  $ 5,000

    What are Bea’s net long-term and short-term gains?
    a.a.       NSTCG = $30,000 NLTCG = $ 0

    b.
    b.       NLTCG = $ 5,000 NSTCG = $10,000

    c.
    c.       NLTCG = $ 5,000 NSTCG + $15,000
    d.
    d.       NLTCG = $15,000 NSTCG = $15,000

    e.
    e.       None of the above

1 points  

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