Exam 17: Tax Consequences of Personal Activities

Lori owns a vacation home that she rents out for about three months each year.Her deduction for expenses allocable to the rental periods is limited to her gross rental income.

(True/False)

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Question 81

Interest paid on home equity debt is not deductible in computing alternative minimum taxable income (AMTI).

(True/False)

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(69)

Question 82

Damage to a personal residence by a tornado is an example of a casualty loss.

(True/False)

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(69)

Question 83

Violet took out a $900,000 mortgage to purchase her personal residence.She can deduct the mortgage interest payments as an itemized deduction.

(True/False)

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(69)

Question 84

Twelve years ago,Mr.Drake incurred a $790,000 mortgage to purchase his principal residence.Last year,he took out a $32,000 loan secured by his considerable equity in the residence and used the proceeds to send his daughter to Stanford University.Which of the following statements is true?

(Multiple Choice)

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Question 85

A thief broke into Kate's condominium and stole her laptop computer.Kate purchased the computer for $1,400,but its current value is only $300.Kate's casualty loss is $1,400.

(True/False)

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(68)

Question 86

James Dean received the following this year. Compute James' gross income.

(Multiple Choice)

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Question 87

Mr.and Mrs.Hunt,ages 38 and 33,have the following allowable itemized deductions this year. Determine the effect on the amount of each deduction if the Hunts engage in a transaction generating $10,000 additional AGI this year.

(Essay)

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Question 88

Helen makes quilts and sells them at the regional county fairs.This year,she earned $950 from quilt sales and spent $3,300 on supplies and travel relating to her quilting activity.If the IRS determines that this activity is a hobby instead of a business,Helen can't deduct her $2,350 net loss.

(True/False)

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(88)

Question 89

Which of the following government transfer payments is included in the recipient's gross income?

(Multiple Choice)

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(90)

Question 90

Ben received a $5,000 tuition scholarship from his local community college.He can exclude the $5,000 from gross income.

(True/False)

4.7/5

(76)

Question 91

Under the terms of a divorce decree,Harold transferred his one-half interest in the marital residence to his former wife Francine.Francine must include the value of the interest in gross income.

(True/False)

4.8/5

(83)

Question 92

Mr.and Mrs.Alvarez paid $130,000 for their home 30 years ago.They recently sold this home and moved into a retirement apartment.Describe the tax consequences of the sale assuming that the amount realized was: a.$125,000 b.$450,000 c.$850,000

(Essay)

4.7/5

(81)

Question 93

Showing 81 - 93 of 93

Lori owns a vacation home that she rents out for about three months each year.Her deduction for expenses allocable to the rental periods is limited to her gross rental income.

Interest paid on home equity debt is not deductible in computing alternative minimum taxable income (AMTI).

Damage to a personal residence by a tornado is an example of a casualty loss.

Violet took out a $900,000 mortgage to purchase her personal residence.She can deduct the mortgage interest payments as an itemized deduction.

Twelve years ago,Mr.Drake incurred a $790,000 mortgage to purchase his principal residence.Last year,he took out a $32,000 loan secured by his considerable equity in the residence and used the proceeds to send his daughter to Stanford University.Which of the following statements is true?

A thief broke into Kate's condominium and stole her laptop computer.Kate purchased the computer for $1,400,but its current value is only $300.Kate's casualty loss is $1,400.

James Dean received the following this year. Compute James' gross income.

Mr.and Mrs.Hunt,ages 38 and 33,have the following allowable itemized deductions this year. Determine the effect on the amount of each deduction if the Hunts engage in a transaction generating $10,000 additional AGI this year.

Helen makes quilts and sells them at the regional county fairs.This year,she earned $950 from quilt sales and spent $3,300 on supplies and travel relating to her quilting activity.If the IRS determines that this activity is a hobby instead of a business,Helen can't deduct her $2,350 net loss.

Which of the following government transfer payments is included in the recipient's gross income?

Ben received a $5,000 tuition scholarship from his local community college.He can exclude the $5,000 from gross income.

Under the terms of a divorce decree,Harold transferred his one-half interest in the marital residence to his former wife Francine.Francine must include the value of the interest in gross income.

Mr.and Mrs.Alvarez paid $130,000 for their home 30 years ago.They recently sold this home and moved into a retirement apartment.Describe the tax consequences of the sale assuming that the amount realized was: a.$125,000 b.$450,000 c.$850,000

Taxes and Taxing Jurisdictions

Policy Standards for a Good Tax

Taxes As Transaction Costs

Maxims of Income Tax Planning

Tax Research

Taxable Income From Business Operations

Property Acquisitions and Cost Recovery Deductions

Property Dispositions

Nontaxable Exchanges

Sole Proprietorships, Partnerships, llcs, and S Corporations

The Corporate Taxpayer

The Choice of Business Entity

Jurisdictional Issues in Business Taxation

The Individual Tax Formula

Compensation and Retirement Planning

Investment and Personal Financial Planning

The Tax Compliance Process

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