Question 1

Points paid in connection with the purchase of a principal residence may be deducted in the year paid.

Accepted Answer

A) True 
 B)False

Question 2

Liz,who is single in 2019,lives in a single family home and owns a second single family home that she rented for the entire year at a fair rental rate.Liz had the following items of income and expense during the current year. Income:
$\begin{array}{|l|c|}
\hline\text { Gross salary and commissions from Ace }\
\text { Corporation }&\$50,000\
\hline \text { Rent received from tenant in Liz's rental house } & 13,000 \
\hline \text { Dividends received on her portfolio of stocks } & 5,000 \
\hline
\end{array}$ Expenses:
$$\begin{array} { | l | l | } 
\hline\text { Interest and property taxes on her own home } & 9,000 \
\hline \text { Taxes, interest and repair expenses on rental house } & 3,500 \
\hline \text { Depreciation expense on rental house } & 2,300 \
\hline
\end{array}$$ What is her adjusted gross income for the year?

Accepted Answer

A) $64,300 
B) $53,200 
C) $62,200 
D) $68,000 
A) $64,300 
B) $53,200 
C) $62,200 
D) $68,000

Question 3

Deductions for adjusted gross income include the amounts paid for all of the following except

Accepted Answer

A) one-half of self employment tax. 
B) home mortgage interest. 
C) student loan interest. 
D) contributions to a Health Savings Account. 
A) one-half of self employment tax. 
B) home mortgage interest. 
C) student loan interest. 
D) contributions to a Health Savings Account.

Question 4

Sheila sells stock,which has a basis of $12,000,to her daughter for $7,000,the stock's fair market value.Subsequently,the daughter sells the stock to an unrelated party for $5,000.Which of the following is true for Sheila and her daughter?

Accepted Answer

A)  $$\begin{array} {| l | l |} 
\hline\text { Sheila } & \text { Daughter } \
\hline \text { recognizes no loss } & \text { recognizes loss of } \$ 2,000 \
\hline
\end{array}$$ 
B)  $$\begin{array} {| l | l |} 
\hline\text { Sheila } & \text { Daughter } \
\hline \text { recognizes no loss } & \text { recognizes loss of } \$ 5,000 \
\hline
\end{array}$$ 
C)  $$\begin{array} { | l | l | } 
\hline \text { Sheila } & \text { Daughter } \
\hline \text { recognizes loss of } \$ 3,000 & \text { recognizes loss of } \$ 5,000 \
\hline
\end{array}$$ 
D)  $$\begin{array} {| l| l| } 
\hline\text { Sheila } & \text { Daughter } \
\hline \text { recognizes loss of } \$ 3,000 & \text { recognizes loss of } \$ 2,000 \
\hline
\end{array}$$ 
A)  $$\begin{array} {| l | l |} 
\hline\text { Sheila } & \text { Daughter } \
\hline \text { recognizes no loss } & \text { recognizes loss of } \$ 2,000 \
\hline
\end{array}$$ 
B)  $$\begin{array} {| l | l |} 
\hline\text { Sheila } & \text { Daughter } \
\hline \text { recognizes no loss } & \text { recognizes loss of } \$ 5,000 \
\hline
\end{array}$$ 
C)  $$\begin{array} { | l | l | } 
\hline \text { Sheila } & \text { Daughter } \
\hline \text { recognizes loss of } \$ 3,000 & \text { recognizes loss of } \$ 5,000 \
\hline
\end{array}$$ 
D)  $$\begin{array} {| l| l| } 
\hline\text { Sheila } & \text { Daughter } \
\hline \text { recognizes loss of } \$ 3,000 & \text { recognizes loss of } \$ 2,000 \
\hline
\end{array}$$

Question 5

Dana purchased an asset from her brother for $15,000.Her brother's basis was $20,000.If Dana sells the asset to an unrelated party for $12,000,she will recognize

Accepted Answer

A) $0. 
B) ($1,000)loss. 
C) ($3,000)loss. 
D) ($4,000)loss. 
A) $0. 
B) ($1,000)loss. 
C) ($3,000)loss. 
D) ($4,000)loss.

Question 6

Rachel is a self-employed business consultant.As a necessary and ordinary component of running and growing her business,she incurs significant expenses for travel and business meals with clients,but she has not kept receipts.She will be able to deduct a reasonable amount of these ordinary and necessary expenses under the Cohan rule.

Accepted Answer

A) True 
 B)False

Question 7

Expenses relating to a hobby,limited to the receipts of the hobby,are deductible as "for AGI" deductions.

Accepted Answer

A) True 
 B)False

Points paid in connection with the purchase of a principal residence may be deducted in the year paid.

Deductions for adjusted gross income include the amounts paid for all of the following except

Sheila sells stock,which has a basis of $12,000,to her daughter for $7,000,the stock's fair market value.Subsequently,the daughter sells the stock to an unrelated party for $5,000.Which of the following is true for Sheila and her daughter?

Dana purchased an asset from her brother for $15,000.Her brother's basis was $20,000.If Dana sells the asset to an unrelated party for $12,000,she will recognize

Expenses relating to a hobby,limited to the receipts of the hobby,are deductible as "for AGI" deductions.

Tax Research

Corporate Formations and Capital Structure

The Corporate Income Tax

Corporate Nonliquidating Distributions

Other Corporate Tax Levies

Corporate Liquidating Distributions

Corporate Acquisitions and Reorganizations

Consolidated Tax Returns

Partnership Formation and Operation

Special Partnership Issues

S Corporations

The Gift Tax

The Estate Tax

Income Taxation of Trusts and Estates

Administrative Procedures

U.S. Taxation of Foreign-Related Transactions

an Introduction to Taxation

Determination of Tax

Gross Income: Inclusions

Gross Income: Exclusions

Property Transactions: Capital Gains and Losses

Business Expenses and Deferred Compensation

Itemized Deductions

Losses and Bad Debts

Depreciation,cost Recovery,amortization,and Depletion

Accounting Periods and Methods

Property Transactions: Nontaxable Exchanges

Property Transactions: Sec1231 and Recapture

Special Tax Computation Methods,tax Credits,and Payment of Tax

Tax Research

Corporations

Partnerships and S Corporations

Taxes and Investment Planning

Filters

Exam 22: Deductions and Losses

Points paid in connection with the purchase of a principal residence may be deducted in the year paid.

Deductions for adjusted gross income include the amounts paid for all of the following except

Sheila sells stock,which has a basis of $12,000,to her daughter for $7,000,the stock's fair market value.Subsequently,the daughter sells the stock to an unrelated party for $5,000.Which of the following is true for Sheila and her daughter?

Dana purchased an asset from her brother for $15,000.Her brother's basis was $20,000.If Dana sells the asset to an unrelated party for $12,000,she will recognize

Expenses relating to a hobby,limited to the receipts of the hobby,are deductible as "for AGI" deductions.

Tax Research

Corporate Formations and Capital Structure

The Corporate Income Tax

Corporate Nonliquidating Distributions

Other Corporate Tax Levies

Corporate Liquidating Distributions

Corporate Acquisitions and Reorganizations

Consolidated Tax Returns

Partnership Formation and Operation

Special Partnership Issues

S Corporations

The Gift Tax

The Estate Tax

Income Taxation of Trusts and Estates

Administrative Procedures

U.S. Taxation of Foreign-Related Transactions

an Introduction to Taxation

Determination of Tax

Gross Income: Inclusions

Gross Income: Exclusions

Property Transactions: Capital Gains and Losses

Business Expenses and Deferred Compensation

Itemized Deductions

Losses and Bad Debts

Depreciation,cost Recovery,amortization,and Depletion

Accounting Periods and Methods

Property Transactions: Nontaxable Exchanges

Property Transactions: Sec1231 and Recapture

Special Tax Computation Methods,tax Credits,and Payment of Tax

Tax Research

Corporations

Partnerships and S Corporations

Taxes and Investment Planning

Filters