Question 1

An individual will be subject to gift tax on gifts made to a charity greater than $15,000.

Accepted Answer

A) True 
 B)False

Question 2

When corporate and noncorporate taxpayers sell real property placed in service after 1986, all depreciation taken will be taxed at a maximum rate of 25%.

Accepted Answer

A) True 
 B)False

Question 3

David and Joycelyn form an equal partnership in the current year. No special allocation is provided for in the partnership agreement. During the year David contributes land having a $90,000 basis and a $100,000 FMV in exchange for the initial partnership interest. In addition, the partnership earns $50,000 of ordinary income while partnership liabilities increase from zero to $30,000 by the end of the tax year. The partnership earns $20,000 of tax- exempt interest during the year. David's basis at the end of the current year is

Accepted Answer

A)  $130,000. 
B)  $140,000. 
C)  $125,000. 
D)  $115,000. 
A)  $130,000. 
B)  $140,000. 
C)  $125,000. 
D)  $115,000.

Question 4

A widow or widower whose spouse passed away in the current year may file a joint tax return as long as the surviving spouse does not remarry before the end of the year.

Accepted Answer

A) True 
 B)False

Question 5

What are arguments for and against preferential treatment of capital gains?

Accepted Answer

Arguments for preferential treatment:
1.

Question 6

The books and records of Finton Corporation, an accrual method taxpayer, reflect the following:   Based on the above, what is the amount of Greg Corporation's current earnings and profits for this year?

Accepted Answer

The answer of The books and records of Finton Corporation,...

Question 7

Network Corporation purchased $200,000 of five- year equipment on March 24, 2016. They elected to expense
$60,000 of the cost under Sec. 179 in effect that year. After depreciating the equipment $28,000 in 2017 and $22,40 2018, the equipment was sold for $190,000.
a. What is the amount of the realized gain (or loss) on the sale?
b. How is the gain or loss taxed?

Accepted Answer

a. The realized gain is $100,4

Question 8

A self- employed consultant takes a client to dinner to propose a new consulting engagement. Assuming appropriate documentation is maintained, the individual will receive a deduction for AGI for 50% of the meal cost.

Accepted Answer

A) True 
 B)False

Question 9

During the year Jason and Kristi, cash- basis taxpayers, paid the following taxes:   What amount can Kristi and Jason claim as an itemized deduction for taxes on their federal income tax return in current year?

Accepted Answer

A)  $10,900 
B)  $7,900 
C)  $15,400 
D)  $8,900 
A)  $10,900 
B)  $7,900 
C)  $15,400 
D)  $8,900

Question 10

Edith contributes land having $100,000 FMV and a $85,000 adjusted basis, which is subject to a $66,000 mortgage in exchange for a one- third interest in the EHK Partnership. The partnership owes no other liabilities. After the contribution, Kate, Edith, and Helen share profits and losses equally and each has a one- third interest in the partnership capital. Assume that Kate has a basis in her partnership interest of $50,000 before Edith's contribution to the partnership. The effect of Edith's contribution on partner Kate's basis is to

Accepted Answer

A)  increase Kate's basis to $77,000. 
B)  increase Kate's basis to $72,000. 
C)  decrease Kate's basis to $28,000. 
D)  No effect on Kate's basis. 
A)  increase Kate's basis to $77,000. 
B)  increase Kate's basis to $72,000. 
C)  decrease Kate's basis to $28,000. 
D)  No effect on Kate's basis.

Question 11

Tia is a 52- year- old, unmarried taxpayer who is an active participant in an employer- sponsored qualified retirement plan. Before IRA contributions, her AGI is $67,000 in 2018.
a. What is the maximum amount she can contribute and the maximum deduction she can receive for a contribu a traditional IRA?
b. What is the maximum amount she can contribute and the maximum deduction she can receive for a contribu a Roth IRA?

Accepted Answer

a. Tia is allowed to contribute up to $6

Question 12

In September of 2018, Michelle sold shares of qualified small business stock for $1,000,000 that had a basis of $200,000. She had held the stock for 17 months. Forty- five days after the sale she purchased other qualified small business stock for $1,100,000. How much of the gain will she recognize?

Accepted Answer

A)  $0 
B)  $900,000 
C)  $800,000 
D)  $100,000 
A)  $0 
B)  $900,000 
C)  $800,000 
D)  $100,000

Question 13

Educational expenses incurred by a self- employed CPA for courses necessary to meet continuing education requirements are fully deductible.

Accepted Answer

A) True 
 B)False

Question 14

Risa exchanges an office building with a $600,000 adjusted basis for an apartment building with a $1,000,000 FMV and $200,000 of marketable securities. What is Risa's basis for the apartment building?

Accepted Answer

A)  $400,000 
B)  $1,000,000 
C)  $800,000 
D)  $600,000 
A)  $400,000 
B)  $1,000,000 
C)  $800,000 
D)  $600,000

Question 15

Carolyn, who earns $400,000, is required to pay John, her ex- husband, $200,000 as part of the property settlement as a result of their divorce agreement which was executed in 2018. In turn, John transfers stock worth $50,000 to Carolyn. What is the amount of Carolyn's adjusted gross income in 2018?

Accepted Answer

A)  $200,000 
B)  $450,000 
C)  $400,000 
D)  $250,000 
A)  $200,000 
B)  $450,000 
C)  $400,000 
D)  $250,000

Question 16

During the current year, Hugo sells equipment for $150,000. The equipment cost $175,000 when placed in service two years ago, and $55,000 of depreciation deductions were allowed. The results of the sale are

Accepted Answer

A)  Sec. 1245 ordinary income $30,000. 
B)  Sec. 1231 gain of $30,000. 
C)  LTCG of $30,000. 
D)  Sec. 1250 ordinary income of $30,000. 
A)  Sec. 1245 ordinary income $30,000. 
B)  Sec. 1231 gain of $30,000. 
C)  LTCG of $30,000. 
D)  Sec. 1250 ordinary income of $30,000.

Question 17

Natasha is a single taxpayer with $100,000 of taxable income. Included in the taxable income is distributions of e this year as follows:   How much of the $6,000 distribution will be taxed at the 15% tax rate?

Accepted Answer

A)  $0 
B)  $1,000 
C)  $6,000 
D)  $3,000 
A)  $0 
B)  $1,000 
C)  $6,000 
D)  $3,000

Question 18

The accumulated earnings tax is imposed on all publicly held corporations.

Accepted Answer

A) True 
 B)False

Question 19

Describe the format of a client memo.

Accepted Answer

A client memo should include a statement

Question 20

Joe Black, a police officer, was injured in the line of duty. He received the following during the current year:   What is the amount that is taxable?

Accepted Answer

A)  $84,000 
B)  $57,000 
C)  $66,000 
D)  $71,000 
A)  $84,000 
B)  $57,000 
C)  $66,000 
D)  $71,000

An individual will be subject to gift tax on gifts made to a charity greater than $15,000.

When corporate and noncorporate taxpayers sell real property placed in service after 1986, all depreciation taken will be taxed at a maximum rate of 25%.

A widow or widower whose spouse passed away in the current year may file a joint tax return as long as the surviving spouse does not remarry before the end of the year.

What are arguments for and against preferential treatment of capital gains?

The books and records of Finton Corporation, an accrual method taxpayer, reflect the following: Based on the above, what is the amount of Greg Corporation's current earnings and profits for this year?

A self- employed consultant takes a client to dinner to propose a new consulting engagement. Assuming appropriate documentation is maintained, the individual will receive a deduction for AGI for 50% of the meal cost.

During the year Jason and Kristi, cash- basis taxpayers, paid the following taxes: What amount can Kristi and Jason claim as an itemized deduction for taxes on their federal income tax return in current year?

In September of 2018, Michelle sold shares of qualified small business stock for $1,000,000 that had a basis of $200,000. She had held the stock for 17 months. Forty- five days after the sale she purchased other qualified small business stock for $1,100,000. How much of the gain will she recognize?

Educational expenses incurred by a self- employed CPA for courses necessary to meet continuing education requirements are fully deductible.

Risa exchanges an office building with a $600,000 adjusted basis for an apartment building with a $1,000,000 FMV and $200,000 of marketable securities. What is Risa's basis for the apartment building?

Carolyn, who earns $400,000, is required to pay John, her ex- husband, $200,000 as part of the property settlement as a result of their divorce agreement which was executed in 2018. In turn, John transfers stock worth $50,000 to Carolyn. What is the amount of Carolyn's adjusted gross income in 2018?

During the current year, Hugo sells equipment for $150,000. The equipment cost $175,000 when placed in service two years ago, and $55,000 of depreciation deductions were allowed. The results of the sale are

Natasha is a single taxpayer with $100,000 of taxable income. Included in the taxable income is distributions of e this year as follows: How much of the $6,000 distribution will be taxed at the 15% tax rate?

The accumulated earnings tax is imposed on all publicly held corporations.

Describe the format of a client memo.

Joe Black, a police officer, was injured in the line of duty. He received the following during the current year: What is the amount that is taxable?

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

Filters

Exam 16: Tax Deductions and Travel Expenses for Employees and Self-Employed Individuals

An individual will be subject to gift tax on gifts made to a charity greater than $15,000.

When corporate and noncorporate taxpayers sell real property placed in service after 1986, all depreciation taken will be taxed at a maximum rate of 25%.

A widow or widower whose spouse passed away in the current year may file a joint tax return as long as the surviving spouse does not remarry before the end of the year.

What are arguments for and against preferential treatment of capital gains?

The books and records of Finton Corporation, an accrual method taxpayer, reflect the following: Based on the above, what is the amount of Greg Corporation's current earnings and profits for this year?

A self- employed consultant takes a client to dinner to propose a new consulting engagement. Assuming appropriate documentation is maintained, the individual will receive a deduction for AGI for 50% of the meal cost.

During the year Jason and Kristi, cash- basis taxpayers, paid the following taxes: What amount can Kristi and Jason claim as an itemized deduction for taxes on their federal income tax return in current year?

In September of 2018, Michelle sold shares of qualified small business stock for $1,000,000 that had a basis of $200,000. She had held the stock for 17 months. Forty- five days after the sale she purchased other qualified small business stock for $1,100,000. How much of the gain will she recognize?

Educational expenses incurred by a self- employed CPA for courses necessary to meet continuing education requirements are fully deductible.

Risa exchanges an office building with a $600,000 adjusted basis for an apartment building with a $1,000,000 FMV and $200,000 of marketable securities. What is Risa's basis for the apartment building?

During the current year, Hugo sells equipment for $150,000. The equipment cost $175,000 when placed in service two years ago, and $55,000 of depreciation deductions were allowed. The results of the sale are

Natasha is a single taxpayer with $100,000 of taxable income. Included in the taxable income is distributions of e this year as follows: How much of the $6,000 distribution will be taxed at the 15% tax rate?

The accumulated earnings tax is imposed on all publicly held corporations.

Describe the format of a client memo.

Joe Black, a police officer, was injured in the line of duty. He received the following during the current year: What is the amount that is taxable?

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

Filters