Exam 4: Business Income and Expenses Part II

Patrick owns a home on the beach in Daytona.He lives in the house for most of the year but leaves town during the popular motor sports race that comes through every year.During that time,he rents his home out for 3 weeks to race fans for $5,000.Which of the following is true?

(Multiple Choice)

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Question 61

Net losses on the rental of vacation homes are limited to 15 percent of total gross income.

(True/False)

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Question 62

If a taxpayer receives an early distribution from an IRA due to disability,he or she will not be subject to a penalty.

(True/False)

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Question 63

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 2017.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 2017?

(Multiple Choice)

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(72)

Question 64

Debbie is 63 years old and retired in 2015.She receives Social Security payments of $12,000 a year and interest income of $30,000.She wishes to put the maximum allowed into an IRA.How much can she contribute to her IRA?

(Essay)

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Question 65

Which of the following statements is true about health savings accounts (HSAs)?

(Multiple Choice)

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Question 66

Which of the following is not deductible as a moving expense?

(Multiple Choice)

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Question 67

If a residence is rented for 15 days or more and is used for personal purposes for not more than 14 days or 10 percent of the days rented,whichever is greater,no allocation of expenses is required and the taxpayer may claim a deduction for the full amount of the expenses.

(True/False)

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Question 68

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 69

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 70

Under the SEP plan provisions,deductible contributions to a qualified retirement plan on behalf of an employee whose net earned income is $20,000 are limited to:

(Multiple Choice)

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Question 71

Choose the correct statement.Passive losses

(Multiple Choice)

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Question 72

Mike owns a house that he rents out for $1,000 per month.His expenses for the 2017 tax year are as follows: Mike bought the property in September of 2008,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)

4.9/5

(77)

Question 73

Carey,a single taxpayer,purchased a rental house in 2017,which he actively manages.During 2017,Carey had a loss of $14,000 from the rental house.If Carey's adjusted gross income for 2017 is $138,000 before the rental loss,what is the amount of Carey's allowable deduction for the rental activity for 2017?

(Multiple Choice)

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Question 74

Thelma works at a liquor store in 2017 and makes $44,000.She also has dividend income of $12,000 and interest income of $1,000.She owns a beach house that gives her $11,000 in net rental income and she owns a stake in a limited partnership that generates a $15,000 loss.What is her adjusted gross income in 2017?

(Multiple Choice)

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Question 75

Clay changes jobs in 2017 and decides to roll his $50,000 retirement plan balance from his old employer's plan into an IRA.He instructs the trustee of the retirement plan to transfer the money directly to the IRA he has chosen. What are the tax consequences of the transfer to Clay? Explain.

(Essay)

4.8/5

(90)

Question 76

Which of the following is not a test which must be met to qualify for the moving expense deduction?

(Multiple Choice)

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(82)

Question 77

In a distribution rollover from an IRA,the recipient must contribute 80 percent of the distributed amount to the new trustee in order for the rollover to be tax free.

(True/False)

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(85)

Question 78

Serissa Corporation has a Section 401(k)plan for its employees.The plan provides for a maximum contribution equal to 15 percent of the employees' salaries.Scott,a 40-year-old employee of Serissa Corporation,elects to contribute the maximum amount possible to the Section 401(k)plan.During 2017,Scott has $42,000 in wages.For 2017,what is the maximum amount that Scott may contribute to the plan on a tax-deferred basis?

(Essay)

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(79)

Question 79

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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(73)

Question 80

Showing 61 - 80 of 96

Patrick owns a home on the beach in Daytona.He lives in the house for most of the year but leaves town during the popular motor sports race that comes through every year.During that time,he rents his home out for 3 weeks to race fans for $5,000.Which of the following is true?

Net losses on the rental of vacation homes are limited to 15 percent of total gross income.

If a taxpayer receives an early distribution from an IRA due to disability,he or she will not be subject to a penalty.

Debbie is 63 years old and retired in 2015.She receives Social Security payments of $12,000 a year and interest income of $30,000.She wishes to put the maximum allowed into an IRA.How much can she contribute to her IRA?

Which of the following statements is true about health savings accounts (HSAs)?

Which of the following is not deductible as a moving expense?

If a residence is rented for 15 days or more and is used for personal purposes for not more than 14 days or 10 percent of the days rented,whichever is greater,no allocation of expenses is required and the taxpayer may claim a deduction for the full amount of the expenses.

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

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.

Under the SEP plan provisions,deductible contributions to a qualified retirement plan on behalf of an employee whose net earned income is $20,000 are limited to:

Choose the correct statement.Passive losses

Clay changes jobs in 2017 and decides to roll his $50,000 retirement plan balance from his old employer's plan into an IRA.He instructs the trustee of the retirement plan to transfer the money directly to the IRA he has chosen. What are the tax consequences of the transfer to Clay? Explain.

Which of the following is not a test which must be met to qualify for the moving expense deduction?

In a distribution rollover from an IRA,the recipient must contribute 80 percent of the distributed amount to the new trustee in order for the rollover to be tax free.

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

Patrick owns a home on the beach in Daytona.He lives in the house for most of the year but leaves town during the popular motor sports race that comes through every year.During that time,he rents his home out for 3 weeks to race fans for $5,000.Which of the following is true?

Net losses on the rental of vacation homes are limited to 15 percent of total gross income.

If a taxpayer receives an early distribution from an IRA due to disability,he or she will not be subject to a penalty.

Debbie is 63 years old and retired in 2015.She receives Social Security payments of $12,000 a year and interest income of $30,000.She wishes to put the maximum allowed into an IRA.How much can she contribute to her IRA?

Which of the following statements is true about health savings accounts (HSAs)?

Which of the following is not deductible as a moving expense?

If a residence is rented for 15 days or more and is used for personal purposes for not more than 14 days or 10 percent of the days rented,whichever is greater,no allocation of expenses is required and the taxpayer may claim a deduction for the full amount of the expenses.

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

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.

Under the SEP plan provisions,deductible contributions to a qualified retirement plan on behalf of an employee whose net earned income is $20,000 are limited to:

Choose the correct statement.Passive losses

Clay changes jobs in 2017 and decides to roll his $50,000 retirement plan balance from his old employer's plan into an IRA.He instructs the trustee of the retirement plan to transfer the money directly to the IRA he has chosen. ​ What are the tax consequences of the transfer to Clay? Explain.

Which of the following is not a test which must be met to qualify for the moving expense deduction?

In a distribution rollover from an IRA,the recipient must contribute 80 percent of the distributed amount to the new trustee in order for the rollover to be tax free.

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

Clay changes jobs in 2017 and decides to roll his $50,000 retirement plan balance from his old employer's plan into an IRA.He instructs the trustee of the retirement plan to transfer the money directly to the IRA he has chosen. What are the tax consequences of the transfer to Clay? Explain.