Question 1

In the computation of a net operating loss, which of the following items is not added to the negative taxable income?

Accepted Answer

A) Losses incurred in a transaction entered into for profit. 
B) Deductible alimony payments. 
C) Personal theft loss. 
D) Losses from theft of securities. 
E) None of the above. 
A) Losses incurred in a transaction entered into for profit. 
B) Deductible alimony payments. 
C) Personal theft loss. 
D) Losses from theft of securities. 
E) None of the above.

Question 2

Nora, single, had the following income and deductions for 2017:
​
   Compute Nora's net operating loss for 2017.

Accepted Answer

The answer of Nora, single, had the following income and...

Question 3

Losses on rental property are classified as deductions for AGI.

Accepted Answer

A) True 
 B)False

Question 4

In determining whether a debt is a business or nonbusiness bad debt, the debtor's use of the borrowed funds is important.

Accepted Answer

A) True 
 B)False

Question 5

Tonya had the following items for last year:
​
   For the current year, Tonya had the following items:
​
   Determine Tonya's adjusted gross income for the current year.

Accepted Answer

The answer of Tonya had the following items for last...

Question 6

Bill, age 40, is married with two dependents. Bill had the following items for the 2017 year: ​
  Based on the above information, what is the net operating loss for Bill and his spouse for the 2017 year?

Accepted Answer

A) $0 
B) ($5,000) 
C) ($7,000) 
D) ($12,000) 
E) None of the above 
A) $0 
B) ($5,000) 
C) ($7,000) 
D) ($12,000) 
E) None of the above

Question 7

An individual may deduct a loss on rental property even if it does not meet the definition of a casualty loss.

Accepted Answer

A) True 
 B)False

Question 8

"Other casualty" means casualties similar to those associated with fires, storms, or shipwrecks.

Accepted Answer

A) True 
 B)False

Question 9

Jed is an electrician. Jed and his wife are accrual basis taxpayers and file a joint return. Jed wired a new house for Alison and billed her $15,000. Alison paid Jed $10,000 and refused to pay the remainder of the bill, claiming the fee to be exorbitant. Jed took Alison to Small Claims Court for the unpaid amount and was awarded a $2,000 judgement. Jed was able to collect the judgement but not the remainder of the bill from Alison. What amount of loss may Jed deduct in the current year?

Accepted Answer

A) $0 
B) $2,000 
C) $3,000 
D) $5,000 
E) None of the above 
A) $0 
B) $2,000 
C) $3,000 
D) $5,000 
E) None of the above

Question 10

A loss is not allowed for a security that declines in value.

Accepted Answer

A) True 
 B)False

Question 11

In 2017, Wally had the following insured personal casualty losses (arising from one casualty). Wally also had $42,000 AGI for the year before considering the casualty. Wally's casualty loss deduction is:

Accepted Answer

A) $1,500. 
B) $1,600. 
C) $4,800. 
D) $58,000. 
E) None of the above. 
A) $1,500. 
B) $1,600. 
C) $4,800. 
D) $58,000. 
E) None of the above.

Question 12

A business bad debt is a debt unrelated to the taxpayer's trade or business either when it was created or when it became worthless.

Accepted Answer

A) True 
 B)False

Question 13

Which of the following events would produce a deductible loss?

Accepted Answer

A) Erosion of personal use land due to rain or wind. 
B) Termite infestation of a personal residence over a several year period. 
C) Damages to personal automobile resulting from a taxpayer's willful negligence. 
D) A misplaced diamond ring. 
E) None of the above. 
A) Erosion of personal use land due to rain or wind. 
B) Termite infestation of a personal residence over a several year period. 
C) Damages to personal automobile resulting from a taxpayer's willful negligence. 
D) A misplaced diamond ring. 
E) None of the above.

Question 14

Roger, an individual, owns a proprietorship called Green Thing. For the year 2017, Roger has the following items:
∙ Business income-$200,000.
∙ Business expense-$150,000.
∙ Loss on a completely destroyed business machine. The machine had an adjusted basis of $25,000 and a fair market value of $20,000.
∙ Loss on a business truck. The truck had an adjusted basis of $8,000. The repairs to fix the truck cost $10,000.
Determine Roger's adjusted gross income for 2017.

Accepted Answer

The answer of Roger, an individual, owns a proprietorship called...

Question 15

A nonbusiness bad debt can offset an unlimited amount of long-term capital gain.

Accepted Answer

A) True 
 B)False

Question 16

Jason, married and filing jointly, had the following income for 2017:
​
   Jason has four dependent children. Calculate the net operating loss for 2017.

Accepted Answer

The answer of Jason, married and filing jointly, had the...

Question 17

The amount of a loss on insured personal use property is reduced by the insurance coverage if no claim is made against the insurer.

Accepted Answer

A) True 
 B)False

Question 18

Green, Inc., manufactures and sells widgets. During the current year, an examination of the company records showed the following items:
​
   Determine Green's domestic production activities deduction for the current year.

Accepted Answer

The answer of Green, Inc., manufactures and sells widgets. During...

Question 19

A cash basis taxpayer must include as income the proceeds from the sale of an account receivable to a collection agency.

Accepted Answer

A) True 
 B)False

Question 20

Taxpayer's home was destroyed by a storm in the current year and the area was declared a disaster area. If the taxpayer elects to treat the loss as having occurred in the prior year, it will be subject to the 10%-of-AGI reduction based on the AGI of the current year.

Accepted Answer

A) True 
 B)False

In the computation of a net operating loss, which of the following items is not added to the negative taxable income?

Nora, single, had the following income and deductions for 2017: Compute Nora's net operating loss for 2017.

Losses on rental property are classified as deductions for AGI.

In determining whether a debt is a business or nonbusiness bad debt, the debtor's use of the borrowed funds is important.

Tonya had the following items for last year: For the current year, Tonya had the following items: Determine Tonya's adjusted gross income for the current year.

Bill, age 40, is married with two dependents. Bill had the following items for the 2017 year: Based on the above information, what is the net operating loss for Bill and his spouse for the 2017 year?

An individual may deduct a loss on rental property even if it does not meet the definition of a casualty loss.

"Other casualty" means casualties similar to those associated with fires, storms, or shipwrecks.

A loss is not allowed for a security that declines in value.

In 2017, Wally had the following insured personal casualty losses (arising from one casualty). Wally also had $42,000 AGI for the year before considering the casualty. Wally's casualty loss deduction is:

A business bad debt is a debt unrelated to the taxpayer's trade or business either when it was created or when it became worthless.

Which of the following events would produce a deductible loss?

A nonbusiness bad debt can offset an unlimited amount of long-term capital gain.

Jason, married and filing jointly, had the following income for 2017: Jason has four dependent children. Calculate the net operating loss for 2017.

The amount of a loss on insured personal use property is reduced by the insurance coverage if no claim is made against the insurer.

Green, Inc., manufactures and sells widgets. During the current year, an examination of the company records showed the following items: Determine Green's domestic production activities deduction for the current year.

A cash basis taxpayer must include as income the proceeds from the sale of an account receivable to a collection agency.

Taxpayer's home was destroyed by a storm in the current year and the area was declared a disaster area. If the taxpayer elects to treat the loss as having occurred in the prior year, it will be subject to the 10%-of-AGI reduction based on the AGI of the current year.

An Introduction to Taxation and Understanding Federal Tax Law

Working With the Tax Law

Tax Formula and Tax Determination; an Overview of Property Transactions

Gross Income: Concepts and Inclusions

Gross Income: Exclusions

Deductions and Losses: in General

Depreciation, Cost Recovery, Amortization, and Depletion

Deductions: Employee and Self-Employed-Related Expenses

Deductions and Losses: Certain Itemized Deductions

Investor Losses

Alternative Minimum Tax

Tax Credits and Payment Procedures

Property Transactions: Determination of Gain or Loss and Basis Considerations

Property Transactions: Nontaxable Exchanges

Property Transactions: Capital Gains and Losses

Property Transactions: 1231 and Recapture Provisions

Accounting Periods and Methods

Deferred Compensation

Corporations and Partnerships

Filters

Exam 7: Deductions and Losses: Certain Business Expenses and Losses

In the computation of a net operating loss, which of the following items is not added to the negative taxable income?

Nora, single, had the following income and deductions for 2017: ​ Compute Nora's net operating loss for 2017.

Losses on rental property are classified as deductions for AGI.

In determining whether a debt is a business or nonbusiness bad debt, the debtor's use of the borrowed funds is important.

Tonya had the following items for last year: ​ For the current year, Tonya had the following items: ​ Determine Tonya's adjusted gross income for the current year.

Bill, age 40, is married with two dependents. Bill had the following items for the 2017 year: ​ Based on the above information, what is the net operating loss for Bill and his spouse for the 2017 year?

An individual may deduct a loss on rental property even if it does not meet the definition of a casualty loss.

"Other casualty" means casualties similar to those associated with fires, storms, or shipwrecks.

A loss is not allowed for a security that declines in value.

In 2017, Wally had the following insured personal casualty losses (arising from one casualty). Wally also had $42,000 AGI for the year before considering the casualty. Wally's casualty loss deduction is:

A business bad debt is a debt unrelated to the taxpayer's trade or business either when it was created or when it became worthless.

Which of the following events would produce a deductible loss?

A nonbusiness bad debt can offset an unlimited amount of long-term capital gain.

Jason, married and filing jointly, had the following income for 2017: ​ Jason has four dependent children. Calculate the net operating loss for 2017.

The amount of a loss on insured personal use property is reduced by the insurance coverage if no claim is made against the insurer.

Green, Inc., manufactures and sells widgets. During the current year, an examination of the company records showed the following items: ​ Determine Green's domestic production activities deduction for the current year.

A cash basis taxpayer must include as income the proceeds from the sale of an account receivable to a collection agency.

Taxpayer's home was destroyed by a storm in the current year and the area was declared a disaster area. If the taxpayer elects to treat the loss as having occurred in the prior year, it will be subject to the 10%-of-AGI reduction based on the AGI of the current year.

An Introduction to Taxation and Understanding Federal Tax Law

Working With the Tax Law

Tax Formula and Tax Determination; an Overview of Property Transactions

Gross Income: Concepts and Inclusions

Gross Income: Exclusions

Deductions and Losses: in General

Depreciation, Cost Recovery, Amortization, and Depletion

Deductions: Employee and Self-Employed-Related Expenses

Deductions and Losses: Certain Itemized Deductions

Investor Losses

Alternative Minimum Tax

Tax Credits and Payment Procedures

Property Transactions: Determination of Gain or Loss and Basis Considerations

Property Transactions: Nontaxable Exchanges

Property Transactions: Capital Gains and Losses

Property Transactions: 1231 and Recapture Provisions

Accounting Periods and Methods

Deferred Compensation

Corporations and Partnerships

Filters

Nora, single, had the following income and deductions for 2017: Compute Nora's net operating loss for 2017.

Tonya had the following items for last year: For the current year, Tonya had the following items: Determine Tonya's adjusted gross income for the current year.

Bill, age 40, is married with two dependents. Bill had the following items for the 2017 year: Based on the above information, what is the net operating loss for Bill and his spouse for the 2017 year?

Jason, married and filing jointly, had the following income for 2017: Jason has four dependent children. Calculate the net operating loss for 2017.

Green, Inc., manufactures and sells widgets. During the current year, an examination of the company records showed the following items: Determine Green's domestic production activities deduction for the current year.