Exam 4: Business Income and Expenses Part II

Chorisia Corporation has a Section 401(k) plan for its employees. The plan provides for maximum contributions equal to 15 percent of the employee's salary. Donna, a 55-year-old employee of Chorisia Corporation, elects to contribute the maximum amount possible to the Section 401(k) plan. During 2016, Donna has $115,000 in wages. For 2016, what is the maximum amount that Donna may contribute to the plan on a tax-deferred basis?

(Essay)

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Question 81

Mike and Rose are married and file jointly. Mike earns $45,000 from wages and Rose reports $450 on her Schedule C as an artist. Since Mike's work does not offer health insurance, Rose pays the following health insurance premiums from her business account: How much can Mike and Rose deduct as self-employed health insurance?

(Essay)

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Question 82

Mike owns a house that he rents out for $1,000 per month. His expenses for the 2016 tax year are as follows: Mike bought the property in September of 2007, and his basis for depreciation on the house is $137,500. He uses straight-line depreciation with a 27 ½-year life, so the depreciation on the house is $5,000. Mike does not use a property manager and handles all aspects of the rental activity himself. a. Calculate Mike's net income or loss from renting the house if his gross rental income is $12,000 ($1,000 × 12 months). b.Is the income or loss on Mike's rental considered to be active, passive, or portfolio income?

(Essay)

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Question 83

In most cases, an individual taxpayer reports rental income and the related expenses on Schedule E.

(True/False)

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Question 84

Paul earns $55,000 during the current year. His employer contributes $3,000 during the year to a qualified retirement plan on behalf of Paul. The amount of the contribution for the year is based on Paul's desire to have a monthly retirement benefit of $3,500. What type of retirement plan is this?

(Multiple Choice)

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Question 85

Lester rents his vacation home for 6 months and lives in the home during the other 6 months of 2016. The gross rental income from the home is $4,500. For the entire year, real estate taxes are $800, interest is $3,000, utilities and maintenance expenses are $2,200, and depreciation expense on the entire home would be $4,000. What is Lester's allowable net loss from renting his vacation home?

(Multiple Choice)

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Question 86

Selma owns a beach cottage that she rents to tourists. In the current year she rented the cottage for 180 days. What is the maximum number of days Selma can use the cottage before her expense deduction will be limited to her gross rental income?

(Multiple Choice)

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Question 87

Which of the following statements is true of a distribution rollover (not a trustee-to-trustee transfer) from a retirement plan?

(Multiple Choice)

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Question 88

A taxpayer who is under 50 years of age and not an active participant in a retirement plan may make a contribution of up to $5,500 to an IRA, subject to the earned income limitation.

(True/False)

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Question 89

In some cases, a taxpayer may deduct an otherwise allowable contribution to an IRA, even though the contribution is made after the close of the tax year.

(True/False)

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Question 90

Bill is the owner of a house with two identical apartments. He resides in one apartment and rents the other apartment to a tenant. The tenant made timely monthly rental payments of $550 per month for the months of January through December 2016. The following expenses were incurred on the entire building: In addition, depreciation allocable to the rented apartment is $1,500. What amount should Bill report as net rental income for 2016?

(Multiple Choice)

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Question 91

Carey, a single taxpayer, purchased a rental house in 2016, which he actively manages. During 2016, Carey had a loss of $14,000 from the rental house. If Carey's adjusted gross income for 2016 is $138,000 before the rental loss, what is the amount of Carey's allowable deduction for the rental activity for 2016?

(Multiple Choice)

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Question 92

Jim lives in California. What is Jim's deadline for making a contribution to traditional IRA or a Roth IRA for 2016?

(Multiple Choice)

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Question 93

Mort is the owner of an apartment building containing ten identical apartments. Mort resides in one apartment and rents out the remaining units. For 2016, the following information is available: What amount should Mort report as net rental income for 2016?

(Multiple Choice)

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Question 94

In order for a pension plan to be considered a "qualified" retirement plan, the plan must satisfy certain minimum vesting requirements.

(True/False)

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Question 95

Ned has active modified adjusted gross income before passive losses of $160,000. He has a loss of $15,000 on rental property he actively manages. How much of the loss is he allowed to deduct against his other income?

(Multiple Choice)

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Question 96

What is the difference between the tax treatment of contributions and distributions from a traditional IRA and a Roth IRA?

(Essay)

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Question 97

Showing 81 - 97 of 97

In most cases, an individual taxpayer reports rental income and the related expenses on Schedule E.

Paul earns $55,000 during the current year. His employer contributes $3,000 during the year to a qualified retirement plan on behalf of Paul. The amount of the contribution for the year is based on Paul's desire to have a monthly retirement benefit of $3,500. What type of retirement plan is this?

Selma owns a beach cottage that she rents to tourists. In the current year she rented the cottage for 180 days. What is the maximum number of days Selma can use the cottage before her expense deduction will be limited to her gross rental income?

Which of the following statements is true of a distribution rollover (not a trustee-to-trustee transfer) from a retirement plan?

A taxpayer who is under 50 years of age and not an active participant in a retirement plan may make a contribution of up to $5,500 to an IRA, subject to the earned income limitation.

In some cases, a taxpayer may deduct an otherwise allowable contribution to an IRA, even though the contribution is made after the close of the tax year.

Jim lives in California. What is Jim's deadline for making a contribution to traditional IRA or a Roth IRA for 2016?

Mort is the owner of an apartment building containing ten identical apartments. Mort resides in one apartment and rents out the remaining units. For 2016, the following information is available: What amount should Mort report as net rental income for 2016?

In order for a pension plan to be considered a "qualified" retirement plan, the plan must satisfy certain minimum vesting requirements.

Ned has active modified adjusted gross income before passive losses of $160,000. He has a loss of $15,000 on rental property he actively manages. How much of the loss is he allowed to deduct against his other income?

What is the difference between the tax treatment of contributions and distributions from a traditional IRA and a Roth IRA?

The Individual Income Tax Return

Gross Income and Exclusions

Business Income and Expenses Part I

Itemized Deductions and Other Incentives

Credits and Special Taxes

Accounting Periods and Methods and Depreciation

Capital Gains and Losses

Withholding Estimated Payments and Payroll Taxes

Partnership Taxation

The Corporate Income Tax

Tax Administration and Tax Planning

Filters

Exam 4: Business Income and Expenses Part II

In most cases, an individual taxpayer reports rental income and the related expenses on Schedule E.

Paul earns $55,000 during the current year. His employer contributes $3,000 during the year to a qualified retirement plan on behalf of Paul. The amount of the contribution for the year is based on Paul's desire to have a monthly retirement benefit of $3,500. What type of retirement plan is this?

Selma owns a beach cottage that she rents to tourists. In the current year she rented the cottage for 180 days. What is the maximum number of days Selma can use the cottage before her expense deduction will be limited to her gross rental income?​

Which of the following statements is true of a distribution rollover (not a trustee-to-trustee transfer) from a retirement plan?

A taxpayer who is under 50 years of age and not an active participant in a retirement plan may make a contribution of up to $5,500 to an IRA, subject to the earned income limitation.

In some cases, a taxpayer may deduct an otherwise allowable contribution to an IRA, even though the contribution is made after the close of the tax year.

Jim lives in California. What is Jim's deadline for making a contribution to traditional IRA or a Roth IRA for 2016?

Mort is the owner of an apartment building containing ten identical apartments. Mort resides in one apartment and rents out the remaining units. For 2016, the following information is available: What amount should Mort report as net rental income for 2016?

In order for a pension plan to be considered a "qualified" retirement plan, the plan must satisfy certain minimum vesting requirements.

Ned has active modified adjusted gross income before passive losses of $160,000. He has a loss of $15,000 on rental property he actively manages. How much of the loss is he allowed to deduct against his other income?

What is the difference between the tax treatment of contributions and distributions from a traditional IRA and a Roth IRA?

The Individual Income Tax Return

Gross Income and Exclusions

Business Income and Expenses Part I

Itemized Deductions and Other Incentives

Credits and Special Taxes

Accounting Periods and Methods and Depreciation

Capital Gains and Losses

Withholding Estimated Payments and Payroll Taxes

Partnership Taxation

The Corporate Income Tax

Tax Administration and Tax Planning

Filters

Selma owns a beach cottage that she rents to tourists. In the current year she rented the cottage for 180 days. What is the maximum number of days Selma can use the cottage before her expense deduction will be limited to her gross rental income?