Question 1

For real property placed in service after 1986, depreciation under the MACRS system is calculated using the

Accepted Answer

A)  200% DB method and a mid- month convention in the year of acquisition and in the year of disposition. 
B)  200% DB method and a half- year convention in the year of acquisition and in the year of disposition. 
C)  straight- line method and a mid- month convention in the year of acquisition and in the year of disposition. 
D)  straight- line method and a half- year convention in the year of acquisition and in the year of disposition. 
A)  200% DB method and a mid- month convention in the year of acquisition and in the year of disposition. 
B)  200% DB method and a half- year convention in the year of acquisition and in the year of disposition. 
C)  straight- line method and a mid- month convention in the year of acquisition and in the year of disposition. 
D)  straight- line method and a half- year convention in the year of acquisition and in the year of disposition.

Question 2

The standard deduction is the maximum amount of itemized deductions which may be claimed by a taxpayer and is based on an individual's filing status, age, and vision.

Accepted Answer

A) True 
 B)False

Question 3

A taxpayer guarantees another person's obligation and is forced to pay the debt under the terms of the guarantee. The original debtor does not repay the taxpayer. The taxpayer/guarantor may deduct the loss.

Accepted Answer

A) True 
 B)False

Question 4

Business energy tax credits are available to businesses that invest in energy- conserving solar energy properties.

Accepted Answer

A) True 
 B)False

Question 5

On June 1, 2015, Buffalo Corporation purchased and placed in service 7- year MACRS tangible property costing
$100,000. On November 10, 2018, Buffalo sold the property for $102,000 after having taken MACRS $47,525 in depreciation deductions. What is the amount and character of Buffalo's gain?

Accepted Answer

The answer of On June 1, 2015, Buffalo Corporation purchased...

Question 6

An individual makes substantial cash contributions to public charities. He will be able to deduct these contribution up to a ceiling of 50% of AGI.

Accepted Answer

A) True 
 B)False

Question 7

Corkie Corporation distributes $80,000 cash along with land having a $60,000 adjusted basis and a $40,000 FMV to its shareholder Josh. What are the tax consequences to Corkie Corporation?

Accepted Answer

A)  $20,000 gain realized and recognized 
B)  $20,000 loss realized but not recognized 
C)  $20,000 gain realized but not recognized 
D)  $20,000 loss realized and recognized 
A)  $20,000 gain realized and recognized 
B)  $20,000 loss realized but not recognized 
C)  $20,000 gain realized but not recognized 
D)  $20,000 loss realized and recognized

Question 8

A newly married person may change tax years to conform to that of his or her spouse so that a joint return may be filed.

Accepted Answer

A) True 
 B)False

Question 9

Melissa acquired oil and gas properties for $600,000. During 2016, she elected to expense the $180,000 of IDC. To depletion allowed was $50,000. At the end of the current year, Melissa sells the property for $700,000. a. What is the amount of and nature of her gain using the facts above?
B) What is the amount of and nature of her gain assuming that she sold the property for $850,000?

Accepted Answer

A. MELISSA HAS REALIZED GAIN OF $150,000

Question 10

Norah, who gives music lessons, is a calendar- year taxpayer using the cash- basis method of accounting. On October 1 of this year, she received $1,200 for a one- year contract beginning on that date to provide 10 lessons. She gave 6 lessons this year. How much should Norah include in income this year?

Accepted Answer

A)  $360 
B)  $1,200 
C)  $480 
D)  $720 
A)  $360 
B)  $1,200 
C)  $480 
D)  $720

Question 11

A corporation realizes a NSTCL this year of $43,000. It will only be able to deduct $3,000 this year.

Accepted Answer

A) True 
 B)False

Question 12

With regard to noncorporate taxpayers, all of the following statements are true regarding Sec. 1250 recapture except

Accepted Answer

A)  Sec. 1250 affects the character of the gain, not the amount of the gain. 
B)  Sec. 1250 ordinary income does not exist if the straight- line method of depreciation is used. 
C)  Sec. 1250 ordinary income is never more than the additional depreciation allowed. 
D)  Sec. 1250 applies to assets sold or exchanged at either a gain or a loss. 
A)  Sec. 1250 affects the character of the gain, not the amount of the gain. 
B)  Sec. 1250 ordinary income does not exist if the straight- line method of depreciation is used. 
C)  Sec. 1250 ordinary income is never more than the additional depreciation allowed. 
D)  Sec. 1250 applies to assets sold or exchanged at either a gain or a loss.

Question 13

Clayton contributes land to the American Red Cross for use as a future site for a new building. His AGI is $50,000. Clayton paid $20,000 for the land eight months ago but its market value at the date of contribution is
$25,000. With no special elections, Clayton's deductible contribution this year is

Accepted Answer

A)  $20,000. 
B)  $18,000. 
C)  $7,000. 
D)  $25,000. 
A)  $20,000. 
B)  $18,000. 
C)  $7,000. 
D)  $25,000.

Question 14

Discuss whether a C corporation or a pass- through entity form of organization would be preferred if taxable income is anticipated to be earned by the business.

Accepted Answer

Taxable income earned by the C corporati

Question 15

For tax purposes, the lower of cost or market method must ordinarily be applied to each separate inventory item.

Accepted Answer

A) True 
 B)False

Question 16

The child and dependent care credit is partially refundable.

Accepted Answer

A) True 
 B)False

Question 17

In the case of foreign- earned income, U.S. citizens may avoid double taxation of income by both the United States and the host country by utilizing a foreign tax credit or by electing the foreign earned income exclusion.

Accepted Answer

A) True 
 B)False

Question 18

During the current year, Martin purchases undeveloped land as an investment. Martin intends to rent the land as pastureland and hopefully sell it later for a profit. In the current year, Martin receives no rent but he does pay taxes of $2,800, mortgage interest of $900 and liability insurance of $500. How much of these expenses can Martin deduct (before any limitations) on his current tax return?

Accepted Answer

A)  $1,400 
B)  $3,700 
C)  $4,200 
D)  $0 
A)  $1,400 
B)  $3,700 
C)  $4,200 
D)  $0

Question 19

Fiona is about to graduate college with a management degree. She has been offered a job as a sales representative for a pharmaceutical company. The job will require significant travel and entertainment expenses for which she will be given a salary supplement. What tax issues should Fiona consider in her decision?

Accepted Answer

Will she be considered an independent co

Question 20

Annisa, who is 28 and single, has adjusted gross income of $55,000, itemized deductions of $5,000 and a lifetime learning credit of $1,000. In 2018, Annisa will have taxable income of

Accepted Answer

A)  $42,000. 
B)  $43,000. 
C)  $50,000. 
D)  $55,000. 
A)  $42,000. 
B)  $43,000. 
C)  $50,000. 
D)  $55,000.

For real property placed in service after 1986, depreciation under the MACRS system is calculated using the

The standard deduction is the maximum amount of itemized deductions which may be claimed by a taxpayer and is based on an individual's filing status, age, and vision.

A taxpayer guarantees another person's obligation and is forced to pay the debt under the terms of the guarantee. The original debtor does not repay the taxpayer. The taxpayer/guarantor may deduct the loss.

Business energy tax credits are available to businesses that invest in energy- conserving solar energy properties.

On June 1, 2015, Buffalo Corporation purchased and placed in service 7- year MACRS tangible property costing $100,000. On November 10, 2018, Buffalo sold the property for $102,000 after having taken MACRS $47,525 in depreciation deductions. What is the amount and character of Buffalo's gain?

An individual makes substantial cash contributions to public charities. He will be able to deduct these contribution up to a ceiling of 50% of AGI.

Corkie Corporation distributes $80,000 cash along with land having a $60,000 adjusted basis and a $40,000 FMV to its shareholder Josh. What are the tax consequences to Corkie Corporation?

A newly married person may change tax years to conform to that of his or her spouse so that a joint return may be filed.

A corporation realizes a NSTCL this year of $43,000. It will only be able to deduct $3,000 this year.

With regard to noncorporate taxpayers, all of the following statements are true regarding Sec. 1250 recapture except

Discuss whether a C corporation or a pass- through entity form of organization would be preferred if taxable income is anticipated to be earned by the business.

For tax purposes, the lower of cost or market method must ordinarily be applied to each separate inventory item.

The child and dependent care credit is partially refundable.

In the case of foreign- earned income, U.S. citizens may avoid double taxation of income by both the United States and the host country by utilizing a foreign tax credit or by electing the foreign earned income exclusion.

Annisa, who is 28 and single, has adjusted gross income of $55,000, itemized deductions of $5,000 and a lifetime learning credit of $1,000. In 2018, Annisa will have taxable income of

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

For real property placed in service after 1986, depreciation under the MACRS system is calculated using the

The standard deduction is the maximum amount of itemized deductions which may be claimed by a taxpayer and is based on an individual's filing status, age, and vision.

A taxpayer guarantees another person's obligation and is forced to pay the debt under the terms of the guarantee. The original debtor does not repay the taxpayer. The taxpayer/guarantor may deduct the loss.

Business energy tax credits are available to businesses that invest in energy- conserving solar energy properties.

On June 1, 2015, Buffalo Corporation purchased and placed in service 7- year MACRS tangible property costing $100,000. On November 10, 2018, Buffalo sold the property for $102,000 after having taken MACRS $47,525 in depreciation deductions. What is the amount and character of Buffalo's gain?

An individual makes substantial cash contributions to public charities. He will be able to deduct these contribution up to a ceiling of 50% of AGI.

Corkie Corporation distributes $80,000 cash along with land having a $60,000 adjusted basis and a $40,000 FMV to its shareholder Josh. What are the tax consequences to Corkie Corporation?

A newly married person may change tax years to conform to that of his or her spouse so that a joint return may be filed.

A corporation realizes a NSTCL this year of $43,000. It will only be able to deduct $3,000 this year.

With regard to noncorporate taxpayers, all of the following statements are true regarding Sec. 1250 recapture except

Discuss whether a C corporation or a pass- through entity form of organization would be preferred if taxable income is anticipated to be earned by the business.

For tax purposes, the lower of cost or market method must ordinarily be applied to each separate inventory item.

The child and dependent care credit is partially refundable.

In the case of foreign- earned income, U.S. citizens may avoid double taxation of income by both the United States and the host country by utilizing a foreign tax credit or by electing the foreign earned income exclusion.

Annisa, who is 28 and single, has adjusted gross income of $55,000, itemized deductions of $5,000 and a lifetime learning credit of $1,000. In 2018, Annisa will have taxable income of

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