ACC 3300 \u00e2\u0080\u0093 Federal Income Tax for Individuals Final Exam (Chap 10-18)<\/p>\n
Choose the best
\nanswer for each of the following questions:<\/p>\n
1.
\nJacob and Chloe are married and together have AGI of $30,000. They have two dependents and file a joint
\nreturn. Each pays $1,200 for
\nhospitalization insurance. During the
\nyear, they paid the following amounts for medical care: $7,000 in doctor and dentist bills and
\nhospital expenses, and $1,700 for prescribed medicine and drugs. In December, they received an insurance
\nreimbursement of $2,700 for hospitalization.
\nDetermine the deduction allowable for medical expenses paid during the
\nyear.
\na. $11,100.
\nb. $9,150.
\nc. $8,850.
\nd. $6,150.
\ne. None of the above.<\/p>\n
2.
\nSamuel and Lopita, married taxpayers, took out
\na mortgage on their home for $150,000 in 2004.
\nIn May of 2010, when the home had a fair market value of $175,000 and
\nthey owed $100,000 on the mortgage, they took out a home equity loan for
\n$120,000. They used the funds to
\npurchase a single engine airplane to be used for recreational travel
\npurposes. What is the maximum amount of
\ndebt on which they can deduct home equity interest?
\na. $75,000.
\nb. $100,000.
\nc. $120,000.
\nd. $175,000.
\ne. None of the above.
\n3.
\nWhich of the following items would be a miscellaneous itemized deduction
\non Schedule A of Form 1040 not subject to
\nthe 2 percent of AGI floor?
\na. Investment expenses under \u00c2\u00a7 212.
\nb. Professional dues.
\nc. Tax return preparation fees.
\nd. Unreimbursed employee expenses.
\ne. None of
\nthe above.<\/p>\n
4.
\nIn
\n2010, Israel, the sole proprietor of a video rental store, pays a $4,000
\npremium for medical insurance for himself and an additional $5,000 for his
\nfamily. Emily, one of Israel\u00e2\u0080\u0099s
\nemployees, pays a $4,000 premium for a medical insurance policy for
\nherself. Which of the following
\nstatements is true?
\na. Israel
\nmay deduct $9,000 as a deduction fromAGI.
\nb. Israel
\nmay deduct $4,000 as a deduction for
\nAGI.
\nc. Emily
\nmay deduct $4,000 as a deduction for AGI.
\nd. Israel
\nmay deduct $9,000 as a deduction for AGI.
\ne. None of the above.<\/p>\n
5.
\nUpon the recommendation of a physician, Joshua has a dust elimination
\nsystem installed in his personal residence.
\nHe suffers from severe allergies.
\nIn connection with this system, Joshua incurs and pays the following
\namounts during the current year:<\/p>\n
Dust elimination system and cost of
\ninstallation $7,000
\n Increase in utility bills due to the
\nsystem 400
\n Cost of certified appraisal 500
\n The system has an estimated useful
\nlife of 5 years. The appraisal was to
\ndetermine the value of Joshua’s residence with and without the system. The appraisal states that the system
\nincreased the value of Joshua’s residence by $3,000. Disregarding percentage limitations, how much
\nof the above expenditures qualify for the medical expense deduction in the
\ncurrent year?
\na. $7,900.
\nb. $7,400.
\nc. $4,500.
\nd. $4,400.
\ne. None of the above.<\/p>\n
6.
\nIn 2010, Aaron pays $3,000 to become a charter member of Western University\u00e2\u0080\u0099s
\nAthletic Council. The membership ensures
\nthat Aaron will receive choice seating at all of Western\u00e2\u0080\u0099s home football
\ngames. Also in 2010, Aaron pays $600
\n(the regular retail price) for season tickets for himself and his wife. For these items, how much qualifies as a
\ncharitable contribution?
\na. $0.
\nb. $600.
\nc. $2,400.
\nd. $3,000.
\ne. None of the above.<\/p>\n
7.
\nEric owns five activities. He
\nelects not to group them together as a single activity under the
\n“appropriate economic unit” standard.
\nHe participates for 100 hours in Activity A, 140 hours in Activity B,
\n240 hours in Activity C, 99 hours in Activity D, and 120 hours in Activity
\nE. Which of the following statements is correct?
\na. Eric is
\na material participant with respect to Activities A, B, C, D, and E.
\nb. Eric is a
\nmaterial participant with respect to Activities B, C, and E only.
\nc. Activities
\nA, B, C, D and E are all significant participation activities.
\nd. Activities
\nB, C and E are all significant participation activities.
\ne. None of
\nthe above.<\/p>\n
8.
\nWanda owns four separate activities.
\nShe elects not to group them together as a single activity under the
\n\u00e2\u0080\u009cappropriate economic unit\u00e2\u0080\u009d standard.
\nWanda participates for 111 hours in Activity A, 155 hours in Activity B,
\n115 hours in Activity C, and 120 hours in Activity D. She has one employee, who works 400 hours in
\nActivity D. Which of the following
\nstatements is incorrect?
\na. Losses from all of the activities can be
\nused to offset Wanda\u00e2\u0080\u0099s active income.
\nb. Wanda is a material participant with respect
\nto Activities A, B, C, and D.
\nc. Wanda is a material participant with
\nrespect to only Activity D.
\nd. Activities A, B, C, and D are all
\nsignificant participation activities.
\ne. None of the above statements is correct.<\/p>\n
9. Sally sells a passive activity with an adjusted basis of
\n$145,000 for $225,000. Suspended losses
\nattributable to this property total $35,000.
\nThe total gain and the taxable gain are:
\n a. $80,000 total gain; $80,000 taxable
\ngain.
\n b. $45,000 total gain; $45,000 taxable
\ngain.
\n c. $80,000 total gain; $0 taxable gain.
\n d. $80,000 total gain; $45,000 taxable
\ngain.
\n e. None of the above.
\n10. Sycamore Corporation, a
\nclosely held nonpersonal service corporation, has $300,000 of passive losses,
\n$240,000 of active business income, and $40,000 of portfolio income. How much of the passive loss may Sycamore
\nCorporation deduct?
\n a. $0.
\n b. $40,000.
\n c. $240,000.
\n d. $300,000.
\n e. None of the above.<\/p>\n
11. Andrew, who is single, has $95,000 of salary,
\n$60,000 of income from a limited partnership, and a $79,000 passive loss from a
\nreal estate rental activity in which he actively participates. His modified adjusted gross income is
\n$95,000. Of the $79,000 loss, how much
\nis deductible?
\n a. $-0-.
\n b. $19,000.
\n c. $25,000.
\n d. $79,000.
\n e. None of the above.
\n12. Paul owns five
\nactivities. He elects not to group them
\ntogether as a single activity under the “appropriate economic unit”
\nstandard. He participates for 100 hours
\nin Activity A, 145 hours in Activity B, 125 hours in Activity C, 105 hours in
\nActivity D, and 126 hours in Activity E.
\nWhich of the following statements is correct?
\na. Activities
\nA, B, C, and E are all significant participation activities.
\nb. Paul is a material participant with respect
\nto Activities B, C, D, and E only.
\nc.
\nPaul is a material participant with
\nrespect to Activities A, B, C, D, and E.
\nd. Activities A, B, C, D and E are all
\nsignificant participation activities.
\ne. None of
\nthe above.
\n13.
\nStevie, who is single, owns a personal residence in the city. He also owns a townhouse near the ocean. He
\nuses the townhouse as a vacation home.
\nIn March 2010 he borrowed $50,000 on a home equity loan and used the
\nproceeds to acquire a luxury automobile. During 2010, he paid the following
\namounts of interest:<\/p>\n
\u00c2\u00b7
\non his personal residence $14,000
\n\u00c2\u00b7
\non the townhouse 7,000
\n\u00c2\u00b7
\non the home equity loan 5,000
\n\u00c2\u00b7
\non credit card obligations 4,000<\/p>\n
What amount, if any, must Stevie
\nrecognize as an AMT adjustment in 2010?
\na. $0.
\nb. $4,000.
\nc. $5,000.
\nd. $9,000.
\ne. None of the above.
\n14.
\nIn 2010, Tito has a $65,000 loss on a passive
\nactivity for regular income tax purposes.
\nFor AMT purposes, his loss is $55,000.
\nThe amount of the AMT adjustment resulting from the passive activity
\nloss is:
\n a. $0.
\n b. $10,000 negative adjustment.
\n c. $10,000 positive adjustment.
\n d. $55,000.
\n e. None of the above.
\n15. Which
\nof the following is a positive adjustment for AMT?
\na. Standard
\ndeduction.
\nb. Real property
\ntaxes.
\nc. Student loan
\ninterest.
\nd. All of the above.
\ne. None of the above.
\n16.
\nWhich of the following is not an itemized deduction allowed for AMT
\npurposes?
\na. Gambling losses.
\nb. Charitable
\ncontributions.
\nc. Property tax on
\nrealty.
\nd. Medical expenses
\nin excess of 10 percent of AGI.
\ne. None of the above
\nare correct.
\n17.
\nSeveral years ago, Freddie purchased a
\nstructure for $50,000 that was originally placed in service in 1929. In the current year, he incurred qualifying
\nrehabilitation expenditures of $100,000.
\nThe amount of the tax credit for rehabilitation expenditures, and the
\namount by which the building\u00e2\u0080\u0099s basis for cost recovery would increase as a
\nresult of the rehabilitation expenditures are the following amounts:
\n a. $10,000 credit, $90,000 basis.
\n b. $10,000 credit, $100,000 basis.
\n c. $10,000 credit, $150,000 basis.
\n d. $20,000 credit, $8,000 basis.
\n e. None of the above.<\/p>\n
18. Sidney
\nis in the process this year of constructing a new office building for her
\nbusiness and has learned that current Federal Regulations require the structure
\nto be accessible to handicapped individuals.
\nTherefore, she incurs an additional $16,250 for various features, such
\nas ramps and widened doorways, to make her office building more
\naccessible. The $16,250 incurred will
\nproduce a disabled access credit of what amount?
\n a. $0.
\n b. $1,000.
\n c. $5,000.
\n d. $8,000.
\n e. None of the above.
\n19. During the year, Panther Corporation (a U.S.
\ncorporation) has U.S. source income of $6,000,000 and foreign source income of
\n$2,000,000. The foreign source income
\ngenerates foreign income taxes of $1,000,000.
\nThe U.S. income tax before the foreign tax credit is $2,800,000. Panther Corporation’s foreign tax credit is:
\na. $250,000.
\nb. $700,000.
\nc. $933,333.
\nd. $1,000,000.
\ne. None of
\nthe above.<\/p>\n
20.
\nNick and Bethany are married and file a joint tax return claiming their
\ntwo children, ages 12 and 9 as dependents.
\nTheir AGI for 2010 is $112,000.
\nNick and Bethany\u00e2\u0080\u0099s child tax credit for 2010 is:
\na. $0.
\nb. $1,800.
\nc. $1,900.
\nd. $2,000.
\ne. None of
\nthe above.<\/p>\n
21. Bryce and Shay are married, file a joint tax
\nreturn, have AGI of $145,000, and have two children. McKenzie is beginning her freshman year at
\nPublic University during Fall 2010, and Cindy is beginning her senior year at
\nSouthwestern University during Fall 2010 after having completed her junior year
\nduring the spring of that year. Both
\nMcKenzie and Cindy are claimed as dependents on their parents\u00e2\u0080\u0099 tax return. McKenzie\u00e2\u0080\u0099s qualifying tuition expenses and
\nfees total $7,500 for the fall semester, while Cindy\u00e2\u0080\u0099s qualifying tuition
\nexpenses and fees total $9,250 for each semester during 2010. Full payment is made for the tuition and
\nrelated expenses for both children during each semester. What amount of education tax credit should be
\ntaken for these higher education costs?
\n a. $-0-
\n b. $2,500
\n c. $4,000
\n d. $5,000
\n e. None of
\nthe above.<\/p>\n
22.
\nIn describing FICA taxes for self-employed taxpayers, which (if any) of
\nthe following statements is correct?
\na. Self-employed
\ntaxpayers are allowed an income tax deduction for all of the self-employment
\ntax paid.
\nb. Self-employed
\ntaxpayers are allowed a deduction from net earnings from self-employment at the
\nfull self-employment rate in determining the self-employment tax.
\nc. Individuals
\nwith net earnings of $400 or more from self-employment are subject to the tax.
\nd. Self-employed
\ntaxpayers pay only the employer\u00e2\u0080\u0099s one-half portion of the tax.
\ne. None of
\nthe above.<\/p>\n
23.
\nSamuel purchased a tract of land for $150,000 in 2008 when he heard that
\na new highway was going to be constructed through the property and that the
\nland would soon be worth $250,000.
\nHighway engineers surveyed the property and indicated that he would
\nprobably get $200,000. The highway
\nproject ( help with nursing paper writing from experts with MSN & DNP degrees) was abandoned in 2010 and the value of the land fell to $100,000. What is the amount of loss Samuel can claim
\nin 2010?
\na. $0.
\nb. $50,000.
\nc. $100,000.
\nd. $150,000. e.None of the above.<\/p>\n
24.
\nRobin purchases land for $110,000.
\nHe incurs legal fees of $1,000 associated with the purchase. He subsequently incurs additional legal fees
\nof $4,000 in having the land rezoned from agricultural to residential. He subdivides the land and installs streets
\nand sewers at a cost of $150,000. What
\nis Robin’s basis for the land and the improve\u00c2\u00adments?
\na. $110,000.
\nb. $260,000.
\nc. $261,000.
\nd. $265,000.
\ne. None of
\nthe above.<\/p>\n
25.
\nRicardo purchases a business for $1,000,000. The fair market value of the assets of the
\nbusiness is as follows:<\/p>\n
Equipment $
\n500,000
\n Building 400,000<\/p>\n
What is Ricardo’s cost basis in each asset?
\na. $500,000
\nequipment, $400,000 building, $0 goodwill.
\nb. $550,000
\nequipment, $250,000 building, $0 goodwill.
\nc. $500,000
\nequipment, $400,000 building, $100,000 goodwill.
\nd. $571,428
\nequipment, $428,572 building, $0 goodwill.
\ne. None of
\nthe above.<\/p>\n
26.
\nMiriam received nontaxable stock rights on June 4, 2010. She allocated $12,000 of the $60,000 basis
\nfor the associated stock to the stock rights.
\nThe stock rights expire on August 14, 2010. What is Miriam’s recognized loss on the
\nexpiration of the stock rights?
\na. $0.
\nb. $12,000.
\nc. $60,000.
\nd. $72,000
\ne. None of
\nthe above.<\/p>\n
27. Harlow owned the following lots of Pansy
\nCorporation stock.<\/p>\n
Purchase date<\/p>\n
No. of shares<\/p>\n
Basis<\/p>\n
October 1, 2007<\/p>\n
50<\/p>\n
$ 4,500<\/p>\n
February 8, 2008<\/p>\n
50<\/p>\n
5,500<\/p>\n
September 5, 2008<\/p>\n
100<\/p>\n
12,000<\/p>\n
On October 12, 2010, 100 shares of stock were sold for
\n$14,000. Harlow did not specifically
\nidentify the shares of stock sold. What
\nis the recognized gain or loss?
\na. $0.
\nb. $2,000.
\nc. $3,000.
\nd. $4,000.
\ne. None of the above.<\/p>\n
28. Lucy gives her sister a machine to use in her
\nbusiness with a fair market value of $10,500 and a basis in Lucy\u00e2\u0080\u0099s hands of
\n$9,500. What is the sister\u00e2\u0080\u0099s basis for
\ndepreciation (cost recovery)?
\n a. $0.
\n b. $1,000.
\nc. $9,500.
\n d. $10,500.
\ne. None of the above.
\n29.
\nJoyce exchanges a machine used in her trade or business for another
\nmachine. In addition, she gives 200
\nshares of Alpha Corporation stock which have a fair market value of $38,000 and
\na basis of $29,000. The old machine has
\nan adjusted basis of $36,000 and the new machine has a fair market value of
\n$100,000. What is the recognized gain or
\nloss and the basis of the new machine?
\na. $26,000
\nand $74,000.
\nb. $9,000
\nand $74,000.
\nc. $26,000
\nand $100,000.
\nd. $9,000
\nand $100,000.
\ne. None of
\nthe above.<\/p>\n
30.
\nIn order to qualify for like-kind exchange treatment:
\na. The form
\nof the transaction must be an exchange.
\nb. Both the
\nproperty transferred and the property given must be held for productive use in
\na trade or business or for investment.
\nc. The
\nproperty must be like kind.
\nd. All of
\nthe above.
\ne. None of
\nthe above.<\/p>\n
31. In regard to nontaxable exchanges which, if
\nany, of the following is correct?
\na. Neither realized gains or losses are
\nrecognized.
\nb. Realized gains are not recognized but
\nrealized losses are recognized.
\nc. Realized gains and losses are recognized.
\nd. Realized losses are not recognized but
\nrealized gains are recognized.<\/p>\n
e. None of the above.<\/p>\n
32. Taxpayer receives
\nstock as a gift from his nephew. The
\nadjusted basis of the stock is $15,000 and the fair market value is
\n$37,000. Taxpayer trades the stock for
\nbonds with a fair market value of $35,000 and $2,000 cash. What is his recognized gain and the basis for
\nthe bonds?
\n a. $2,000, $17,000.
\n b. $0, $15,000.
\n c. $2,000, $15,000.
\n d. $22,000, $35,000.
\n e. None of the above.<\/p>\n
33. On October 1, Tabitha
\nexchanged an apartment building (adjusted basis of $675,000 and subject to a
\nmortgage of $325,000) for another apartment building owned by Edwin (fair
\nmarket value of $950,000 and subject to a mortgage of $325,000). The property transfers were made subject to
\nthe outstanding mortgages. What amount
\nof gain should Tabitha recognize?
\n a. $0.
\n b. $50,000.
\n c. $225,000.
\n d. $275,000.
\n e. None of the above.
\n34. Cedar,
\nInc., owns a delivery truck which initially cost $30,000. After depreciation of $25,000 had been
\ndeducted, the truck was traded-in on a new truck that cost $50,000. Cedar was required to pay the car dealer
\n$20,000 in cash. What is Cedar\u00e2\u0080\u0099s basis
\nfor the new truck?
\na. $0.
\nb. $25,000.
\nc. $50,000.
\nd. $75,000.
\ne. None of the above.<\/p>\n
35. A nonbusiness bad debt held for 18 months is
\ntreated:
\na. As an ordinary loss.
\nb.
\nAs a short-term capital loss.
\nc.
\nAs a 25% long-term capital loss.
\nd. As a
\nlong-term capital loss.
\ne.
\nNone of the above.<\/p>\n
36.
\nWalnut Company signs a 15-year franchise
\nagreement with Cookie Company. Cookie
\nCompany retained significant powers, rights, and a continuing interest. Walnut (the franchisee) makes noncontingent
\npayments of $25,000 per year for the first five years of the franchise. Walnut Company also pays a contingent fee of
\n2% of gross sales every month. Which of
\nthe following statements is correct?
\na. Walnut Company may deduct the $25,000
\nper year noncontingent payments in full as they are made.
\n b. Walnut
\nCompany may deduct the monthly contingent fee as it is paid.
\n c. Walnut
\nCompany may deduct both the noncontingent annual fee and the contingent
\nmonthly fees as they are paid.
\nd. Walnut Company may not deduct either
\nthe noncontingent annual fee or the contingent monthly fees as they are paid.
\n e. None of the above.
\n37. On September 10, 2010, an investor purchased
\n1,000 shares of Melon Corporation for $10,000.
\nOn July 2, 2011, the stock became worthless. What is the recognized gain or loss and how
\nis it classified?
\na. $3,000
\nSTCL.
\nb. $10,000
\nSTCL.
\nc. $3,000
\nLTCL.
\nd. $10,000
\nLTCL.
\ne. None of the above.<\/p>\n
38. Sophia purchased for $8,700 a $10,000 bond
\nwhen it was issued two years ago. Sophia
\namortized $300 of the original issue discount and then sold the bond for
\n$9,500. Which of the following statements
\nis correct?
\na. Sophia has $1,100 of long-term capital
\ngain.
\nb. Sophia has $800 of long-term capital gain.
\nc. Sophia has $500 of long-term capital gain.
\nd. Sophia has $800 long-term capital loss.
\ne. None of the above.<\/p>\n
39. Anthony lives in an apartment building and
\nhas a two-year lease that began eleven months ago. His landlord is willing to pay Anthony $3,000
\nto vacate the apartment immediately. The
\nlandlord wants to sell the building to a buyer who will convert the building
\ninto condominiums. Anthony\u00e2\u0080\u0099s lease on
\nthe apartment is a capital asset, but has no tax basis. The $3,000 Anthony will receive if he accepts
\nthe landlord\u00e2\u0080\u0099s offer will be:
\na. A long-term capital gain.
\nb. A short-term capital gain.
\nc. An ordinary gain.
\nd. A short-term capital loss.
\ne. Excludible from gross income.<\/p>\n
40. Gerard has a NLTCG of $20,000 and a NSTCL of
\n$30,000. What is Gerard’s 2010 capital
\nloss deduction if Gerard’s adjusted gross income for 2010 (before considering
\ncapital asset transactions) is $60,000?
\na. $30,000.
\nb. $20,000.
\nc. $10,000.
\nd. $3,000.
\ne. None of the above.<\/p>\n
41. Jamie elects to treat the cutting of timber
\nas a sale or exchange under \u00c2\u00a7 1231.
\nJamie purchased the land for $100,000 and the timber for $125,000
\nseveral years ago. On the first day of
\n2010, the timber was appraised at $220,000 and in September 2010 it was cut and
\nsold for $275,000. What is Jamie’s ordinary income from this
\ntransaction?
\na. $0.
\nb. $55,000.
\nc. $95,000.
\nd. $150,000.
\ne. None of
\nthe above.<\/p>\n
42. Which of the following is \u00c2\u00a7 1231 property?
\na. Property where casualty losses exceed
\ncasualty gains for the taxable year.
\nb. Property not held for the long-term holding
\nperiod.
\nc. Property held for sale to customers.
\nd. Purchased intangibles.
\ne. None of the above.<\/p>\n
43. An individual has a $40,000 \u00c2\u00a7 1245 gain, a
\n$65,000 \u00c2\u00a7 1231 gain, a $45,000 \u00c2\u00a7 1231 loss, a $30,000 \u00c2\u00a7 1231 lookback loss, and
\na $90,000 long-term capital gain. The
\nnet long-term capital gain is:
\na. $155,000.
\nb. $125,000.
\nc. $100,000.
\nd. $90,000.
\ne. None of the above.<\/p>\n
44.
\nWhich, if any, of the following is correct regarding \u00c2\u00a7 1245 recapture?
\na. It applies to the total amount of
\ndepreciation allowed or allowable regardless of the depreciation method used.
\nb. It applies to gains but not losses.
\nc. It applies regardless of the holding period
\nof the property.
\nd. All of the above.
\ne. None of
\nthe above.<\/p>\n
45. A retail building used in the trucking
\nbusiness of a sole proprietor is sold on February 10, 2010 for $300,000. It had been acquired in 1992 for
\n$275,000. Straight-line depreciation of
\n$175,000 had been taken on the property.
\nWhat is the maximum
\nunrecaptured \u00c2\u00a7 1250 gain from this disposition after considering depreciation recapture?
\na. $0.
\nb. $100,000.
\nc. $175,000.
\nd. $275,000.
\ne. None of the above.<\/p>\n
46. The HAT Partnership has three corporate
\npartners with taxable years and ownership interests in the venture as follows:<\/p>\n
Tax Year Interest in
\n Partner Ending
\n Partnership
\n H
\nInc. April 30 30%
\n A
\nInc. October 31 40%
\n T
\nInc. November 30 30%<\/p>\n
a. A
\npartnership must use the calendar year to report its income.
\nb. The
\npartnership can elect to use a November year end.
\nc. Under
\nthe least aggregate deferral calculations, using a fiscal year ending October
\n31 will result in an aggregate deferral of .30 (1 X .30) with respect to T and
\n1.8 (6 X .30) with respect to H.
\nd. The
\npartnership must use an October 31st year end since A Inc. has the
\nlargest ownership interest.
\ne.
\nNone of the above.<\/p>\n
47. Which of the following is not an exception to the accrual method
\nof reporting requirement for corporations?
\na. A corporation with average annual gross
\nreceipts for the most recent three-year period of $5 million or less.
\nb. A tax shelter.
\nc. A farming business.
\nd. A qualified personal service corporation.
\ne. None of the above.
\n48. Justin sold land
\nfor $200,000 plus a note for $400,000.
\nThe interest rate on the note was equal to the Federal rate. The fair market value of the note was
\n$400,000. His basis in the land was
\n$75,000.
\n a. If
\nJustin is an accrual basis taxpayer and does not use the installment
\nmethod to report the gain, his gain in the year of sale is $525,000 ($200,000 +
\n$400,000 \u00e2\u0080\u0093 $75,000).
\n b. If
\nJustin is a cash basis taxpayer, he cannot use the installment method to report
\nthe gain.
\n c. If
\nJustin is a cash basis taxpayer and uses the installment method, the contract
\nprice is $400,000.
\n d. If
\nJustin is a cash basis taxpayer, his gain in the year of the sale is $125,000
\n($200,000 \u00e2\u0080\u0093 $75,000).
\n e. None of the above. <\/p>\n
49. In 2010, Jackie sold land to her son Horatio
\nfor $100,000 cash and an installment note for $400,000. Jackie’s adjusted basis was $200,000. In 2011, after paying $10,000 interest but
\nnothing on the principal, Horatio sold the land for $625,000 cash. As a result of the second disposition, what
\ngain must Jackie recognize in 2011?
\na. $400,000.
\nb. $200,000.
\nc. $240,000.
\nd. $60,000.
\ne. None of the above.<\/p>\n
50. Which, if any, of the following transactions
\nwill accelerate the gain on an installment note?
\na. Contributions of capital to a
\npartnership.
\nb. Transfers by gift.
\nc. Transfers due to taxpayer\u00e2\u0080\u0099s death.
\nd. Transfers pursuant to tax-free
\nincorporations.
\ne. None of the above.<\/p>\n","protected":false},"excerpt":{"rendered":"
ACC 3300 \u00e2\u0080\u0093 Federal Income Tax for Individuals Final Exam (Chap 10-18) Choose the best answer for each of the following questions: 1. Jacob and\u2026<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[8827,10099,10540,10536,10892,10538,10539,10537,10891],"tags":[10549,10616,10615,7687,10627,8857,10552,10295,10548,10622,8907],"class_list":["post-130311","post","type-post","status-publish","format-standard","hentry","category-australia-essays","category-buy-essay","category-cheap-essay-writers","category-get-assignments-done","category-page-paper","category-phd-essay-writers","category-research-paper-writing-service-for-any-topic","category-study-bay-essay","category-write-my-assignment-ireland","tag-ai-plagiarism-free-essay-writing-tool","tag-australian-best-tutors","tag-best-trans-tutors","tag-buy-essay-uk","tag-cheap-dissertation-writer","tag-help-with-writing-an-essay","tag-help-write-my-paper-ai-free","tag-homework-for-you","tag-online-essay-writers","tag-phd-essays","tag-write-my-essay-for-me"],"_links":{"self":[{"href":"https:\/\/www.studyproessays.com\/help\/wp-json\/wp\/v2\/posts\/130311","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.studyproessays.com\/help\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.studyproessays.com\/help\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.studyproessays.com\/help\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.studyproessays.com\/help\/wp-json\/wp\/v2\/comments?post=130311"}],"version-history":[{"count":0,"href":"https:\/\/www.studyproessays.com\/help\/wp-json\/wp\/v2\/posts\/130311\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.studyproessays.com\/help\/wp-json\/wp\/v2\/media?parent=130311"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.studyproessays.com\/help\/wp-json\/wp\/v2\/categories?post=130311"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.studyproessays.com\/help\/wp-json\/wp\/v2\/tags?post=130311"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}