Question: In 2014, Grant purchased land for $103,

> Ramon received a gift of stock from his uncle. The basis of the stock to his uncle was $25,000, and it had a FMV of $18,000 at the date of the gift. The donor held the property for more than one year. Complete the following chart under the independent

> Jose purchased a vehicle for business and personal use. In 2017 he used the vehicle 18,000 miles (80%) for business and calculated his vehicle expenses using the standard mileage rate (mileage was incurred ratably throughout the year). He paid $1,400 in

> In 2015 Jessica bought a new heavy truck for $45,000 to use 80% for her sole proprietorship. Total miles driven include 12,000 in 2015, 14,500 in 2016, and 13,000 in 2017. a. If Jessica uses the standard mileage method, how much may she deduct on her 2

> During 2017, Roberto sold 830 shares of Casual Investor Mutual fund for $8.875 per share. The shares were purchased on the following dates: Date Shares Price  May 31, 2013 400 $9.375  September 18, 2014 225 $8.500  October 21, 2014 425 $

> Lois purchased the following blocks of Westgate Stock: Date Shares Price  June 12, 2014 1,000 $4.225  October 21, 2014 2,000 $4.775  December 18, 2016 1,500 $5.500   Lois sold 1,600 shares of the stock on November 20, 2017 for $5.00 per

> Tim and Martha paid $7,900 in qualified employment-related expenses for their three young children who live with them in their household. Martha received $1,800 of dependent care assistance from her employer, which was properly excluded from gross incom

> Determine the amount of child tax credit in each of the following cases. a) A single parent with modified AGI of $43,400 and two children. b) A single parent with modified AGI of $77,058 and three children. c) A married couple with modified AGI of $107,

> Janet owns a home at the lake. She incurs the following expenses: Mortgage interest…………………………..$1,300 Property taxes ……………………………………800 Insurance……………………………….………1,500 Utilities……………………………………………1,800 Repairs………………………………………………300 Depreciation…………………………………

> Mabel, Loretta, and Margaret are equal partners in a local restaurant. The restaurant reports the following items for the current year: Revenue……………………………………………$600,000 Business expenses………………………………. 310,000 Investment expenses ……………………………150,000 Short

> Randolph and Tammy own a second home. They spent 45 days there and rented it for 88 days at $150 per day during the year. The total costs relating to the home include the following: Mortgage interest………………………. $4,500 Property taxes ………………………………. 1,200

> Betsy acquired a new network system on June 5, 2017 (5-year class property) for $75,000. She expects taxable income from the business will always be about $175,000 without regard to the §179 election. Betsy will elect §179 expensing. She also acquired

> Matt and Marie own a vacation home at the beach. During the year, they rented the house for 42 days (6 weeks) at $890 per week and used it for personal use for 58 days. The total costs of maintaining the home are as follows: Mortgage interest…………………….

> In 2015, Gerald loaned Main Street Bakery $55,000. In 2016, he learned that he would probably receive only $6,400 of the loan. In 2017, Gerald received $3,000 in final settlement of the loan. Calculate Gerald’s possible deductions with respect to the

> What is the AGI limit above which each the following taxpayers would not be eligible to receive a credit for the elderly or the disabled? a) A single taxpayer eligible for the credit who receives $1,000 of nontaxable social security benefits. b) Taxpaye

> Ramone is a tax attorney and he owns an office building that he rents for $8,500/month. He is responsible for paying all taxes and expenses relating to the building’s operation and maintenance. Is Ramone engaged in the trade or business of renting real

> Kelly is a self-employed tax attorney whose practice primarily involves tax planning. During the year, she attended a three-day seminar regarding new changes to the tax law. She incurred the following expenses: Lodging……………………………. $400 Meals………………………………

> Lauprechta Inc. has the following employees on payroll: Semimonthly Withholding Marital Payroll Allowances Status Naila $5,800 4 Married Wilfred $5,000 3 Married Byron $3,200 1

> Jacob Turner hired Jen Hatcher as a housekeeper starting on January 2 at $750 per month. Jacob does not withhold any federal taxes. Assume that Jen is not a housekeeper for anyone else. Assume Jacob paid $2,250 in wages for the fourth quarter of 2017.

> CFG Company has the following employees: Wages Paid Eddie……………………………………. $12,000 Melanie……………………………………. 6,000 Shelly………………………………………22,000 CFG receives the m

> Baker Company is trying to determine how often it needs to deposit payroll taxes for calendar year 2017. The company made the following quarterly payroll tax deposits during the last two years: Quarter beginning January 1, 2015…………….……. $ 10,000 Quarter

> Roberto’s salary is $129,600 in 2017. Roberto is paid on a semimonthly basis, is single, and claims one allowance a. What is Roberto’s federal tax withholding per pay period? b. What is Roberto’s FICA withholding per pay period before he reaches the soc

> Henry, who earned $93,840 during 2017, is paid on a monthly basis, is married, and claims four allowances. a. What is Henry’s federal tax withholding for each pay period? b. What is Henry’s FICA withholding for each pay period?

> Lisa earns $65,000 per year. She is married and claims three allowances. a. If she is paid weekly, what is her withholding per paycheck? b. If she is paid monthly, what is her withholding per paycheck? c. If she is paid biweekly, what is her withhold

> Martin is married and claims four exemptions on his W-4. What is his federal income tax withholding under the following conditions? a. Martin is paid semimonthly, and his gross pay is $3,600 per paycheck. b. Martin is paid monthly, and his gross pay is

> Allison is paid $1,325 per week. What is the amount of federal income tax withheld from Allison’s paycheck under the following conditions? a. Allison is single and claims two withholding allowances b. Allison is married and claims two withholding al

> Under which of the following situations would a taxpayer most likely take the foreign taxes paid as an itemized deduction rather than as a foreign tax credit? a. The foreign tax paid was less than 15%. b. The foreign tax paid was to a European country.

> Michael paid $3,350 in foreign income taxes to Argentina. His total worldwide income was $75,000, which included $9,800 of income from Argentina. His U.S. tax liability is $18,750. How much can Michael claim as a foreign tax credit? a. $2,450. b. $2,

> Joyce has $82,000 total worldwide income, which includes $11,000 of taxable income from China. She paid $2,200 in foreign income taxes to China, and her U.S. tax liability is $21,610. Joyce’s foreign tax credit is: a. $0. b. $2,200. c. $2,899. d. $11,

> Jamison is a single dad with two dependent children, Zoey, age 7 and Conner, age 3. He has an AGI of $69,000 and paid $4,300 to a qualified day care center for the two children. What amount can Jamison receive for the child and dependent care credit?

> Sean and Jenny own a home in Boulder City, Nevada, near Lake Mead. During the year, they rented the house for 40 days for $3,000 and used it for personal use for 18 days. The house remained vacant for the remainder of the year. The expenses for the ho

> Darren and Nikki own a cabin in Mammoth, California. During the year, they rented it for 45 days for $9,000 and used it for 12 days for personal use. The house remained vacant for the remainder of the year. The expenses for the house included $8,000 i

> Which of the following items is not deductible as rental expense? a. Advertising. b. Repairs and maintenance. c. New bathroom addition. d. Insurance.

> Assume the same facts as Question 22, except that James rented the Lake Tahoe home for 40 days for $4,600. What is his net income or loss from the rental of his home (without considering the passive loss limitation)? Use the IRS method for allocation of

> James owns a home in Lake Tahoe, Nevada, that he rented for $1,600 for two weeks during the summer. He lived there for a total of 120 days, and the rest of the year the house was vacant. The expenses for the home included $6,000 in mortgage interest, $9

> Ginny owns a house in northern Wisconsin that she rents for $1,600 per month. Ginny does not use the property personally. While she was in Europe for Christmas, the water heater on the property failed, and her tenants repaired it for $1,200. For the f

> Dennis receives $11,100 during the current tax year from Blanca for some office space in Anaheim, California. The rent covers eight months, from August 1 of the current year to March 31 of the following year. The amount also includes a security deposit

> Jermaine owns a rental home in Lake Tahoe and traveled there from his home in San Francisco for maintenance and repairs three times this year. The round trip from San Francisco to Lake Tahoe is approximately 167 miles. How much travel cost can Jermaine

> From which of the following flow-through entities is ordinary income (K-1) considered self-employment income? a. Partnership. b. S Corporation. c. Trusts. d. Estates.

> Which of the following entity (ies) is (are) considered flow-through? a. Partnership. b. S Corporation. c. LLC. d. All are considered flow-through entities.

> What is the maximum amount of passive losses from a rental activity that a taxpayer can deduct against active and portfolio income per year (assuming no passive loss limitation due to AGI or personal use of the property)? a. $0. b. $15,000. c. $25,000

> Sally is a full-time author and recently published her third mystery novel. The royalty income she receives from the publisher this year should be reported on what schedule? a. Schedule E. b. Schedule D. c. Schedule A. d. Schedule C.

> Colin is a high school chemistry teacher who owns some land in Oklahoma that produces oil from its small oil reserve. On what schedule should Colin report the royalty income he receives? a. Schedule A. b. Schedule C. c. Schedule E d. Schedule SE.

> Nicolette and Brady own a cabin in Lake Arrowhead, California that they rent out during the winter and use the rest of the year. The rental property is categorized as personal/rental property, and their personal use is determined to be 68% (based on the

> On August 1 of the current year, Jennifer and Tyler purchased a cabin for $950,000. Of that amount, $500,000 was for the land. How much depreciation deduction can Jennifer and Tyler take in the current year assuming that the cabin was rented starting o

> Which statement is true regarding short-term capital gains? a. If there are a net short-term gain and a net long-term gain, both gains are taxed at regular rates. b. A long-term loss offsets a short-term gain, and if a gain results, the gain is taxed at

> Blair sold the following stocks in 2017: 200 shares of Dearborn Investments purchased May 15, 2016, for $3,050 and sold on January 9, 2017 for $4,135; and 40 shares of State Street Investments, purchased November 7, 2014, for $11,875 and sold on March 29

> In 2005, Duncan purchased 2,000 shares of stock for $50,000 in a midsize local company with gross assets of $15,000,000. In 2017, Duncan sold the stock for $68,000. How is the gain treated for tax purposes? a. $18,000 capital gain and taxed at prefere

> Medhat and Neveen, married filing jointly, have $390,000 in MAGI and $86,000 of net investment income (NII). They will pay a surtax of: a. $0. b. $2,052. c. $2,580. d. $3,268.

> On May 20, 2016, Jessica purchased land for $105,647 to use in her business. She sold it on May 21, 2017 for $102,595. What are the amount and type of loss on this sale if Jessica does not have any other sales from a trade or business? a. $3,052 deferr

> All of the following expenses increase the basis of stock held for investment except a. Commission fees on the purchase of the stock. b. Stock splits. c. Stock dividends from a dividend reinvestment plan. d. All of the above increase the basis of stock

> All of the following statements regarding the definition of basis other than cost are true except a. The basis for assets received as a gift depends on whether the FMV is greater than, equal to, or less than the donor’s basis at the time of the gift. b.

> In 2017 Ann received 1,000 shares of stock as a gift from her husband, Tim, who purchased them in 2008. At the time of the gift, the FMV of the stock was $29,300 and Tim’s basis was $31,000. If Ann sells the stock for $26,834 in 2017 what is the nature

> In 2017 Ann received 1,000 shares of stock as a gift from her husband, Tim, who purchased them in 2008. At the time of the gift, the FMV of the stock was $29,300 and Tim’s basis was $31,000. If Ann sells the stock for $32,834 in 2017, what are the natu

> Francisco, a single taxpayer, has income from his W-2 of $93,250. He also has a short-term capital loss of $7,311 a short-term capital gain of $2,100, and a long-term capital gain of $4,680. What is Francisco’s AGI for 2017? a. $92,719. b. $93,250. c.

> Shannon bought an apartment building in July 2011for $360,000 and sold it for $480,000 in 2017. There was $77,994 of accumulated depreciation allowed on the apartment building. Assuming that Shannon is in the 33% tax bracket, how much of her gain is ta

> Amal received a Form 1099-DIV with a capital gain distribution of $210. She also received a Form 1099-B from the sale of 240 shares of AMS stock she purchased for $2,900 plus a $28 commission fee on February 22, 2016. The net proceeds of the stock sale

> Alton received a Form 1099-B that shows a net sales price of $3,500 on the sale of 600 shares of FNP Company. He bought the stock on October 21, 2016, and sold it on October 22, 2017. His basis in the stock is $2,025, of which $25 is a commission fee.

> When there are a net short-term loss and a net long-term loss, which of the following is true? a. The entire short-term loss is used to reduce other income before the long-term loss can be used to offset other income. b. A long-term loss is used to red

> Which is true regarding long-term capital gains? a. A net long-term gain can be taxed at 28%, 25%, 20%, 15% or 0%, depending on the type of gain generated. b. A net long-term loss can be offset against a long-term gain, and if there is a resulting long-

> Jim sells a parcel of land for $75,000 cash and the buyer assumes Jim’s liability of $10,000 on the land. Jim’s basis is $ 64,000. What is the gain or loss on the sale? a. $1,000 loss. b. $1,000gain. c. $11,000 gain. d. $21,000 gain.

> The maximum tax bases and percentages for 2017 for the two portions of the self-employment tax are which of the following? Social Security Medicare a. 127,200; 12.4% Unlimited; 2.9%. b. 127,200; 12.4% Unlimited; 15.3%. c. 118,500; 12.4% Unli

> Annie is self-employed and has $58,000 in income from her business. She also has investments that generated dividends of $3,000 and interest of $2,500. What is Annie’s self-employment tax for the year? a. $8,195. b. $8,619. c. $8,874. d. $8,972.

> Which of the following individuals can deduct education expenses? a. A real estate broker who attends college to get an accounting degree. b. A CPA who attends a review course to obtain his building contractor’s license. c. A corporate executive atte

> Which of the following is not a relevant factor to be considered in deciding whether an activity is profit seeking or a hobby? a. Manner in which the taxpayer carries on the activity. b. Expertise of the taxpayer or his or her advisers. c. Time and effo

> Jake runs a business out of his home. He uses 600 square feet of his home exclusively for the business. His home is 2,400 square feet in total. Jake had $27,000 of business revenue and $22,000 of business expenses from his home-based business. The f

> Jimmy took a business trip from Dallas to Brazil. He was there for a total of seven days, of which two were weekend days. Over the weekend, he spent his time sightseeing and relaxing. His expenses were as follows: Airfare $ 1,400  Lodging (7 days

> Frank purchased a vehicle for business and personal use. In 2017, he used the vehicle 70% for business (11,000 business miles incurred equally throughout the year) and calculated his vehicle expenses using the standard mileage rate. Frank also paid $1,

> Which of the following is false with respect to the standard mileage rate? a. It can be used if the taxpayer owns the vehicle and uses the standard mileage rate for the first year it was placed in service. b. It includes parking fees, tolls, and propert

> Jordan has two jobs. She works as a night auditor at the Moonlight Motel. When her shift at the motel is over, she works as a short-order cook at the Greasy Spoon Restaurant. On a typical day, she drives the following number of miles: Home to Moonlight

> Section 179 expense is available for all of the following business assets except a. Office building. b. Office furniture. c. Computer. d. Delivery truck.

> During the year, Cory purchased a log skidder (7-year property) for $55,000 for his business. Assume that he has income from his business of $30,000, and he and his wife have combined salaries and wages income of $40,000. What is the maximum deduction

> On June 30, 2017, Ken purchased an apartment building for $500,000. Determine the cost recovery deduction for 2017: a. $4,925. b. $5,335. c. $6,955. d. $9,850.

> Roy purchased an office building on March 30, 2014, for $250,000. $25,000 of which was for the land. On July 30, 2017, he sold the office building. What is the cost recovery deduction for 2017? a. $0. b. $3,125. c. $5,769. d. $6,410.

> Lawrence purchased an apartment building on February 10, 2017, for $330,000, $30,000 of which was for the land. What is the cost recovery deduction for 2017? a. $0. b. $ 6,741. c. $ 9,546. d. $10,660.

> On April 15, 2015, Andy purchased some furniture and fixtures (7-year property) for $10,000 to be used in his business. He did not elect to expense the equipment under §179 or bonus depreciation. On June 30, 2017, he sells the equipment. What is the c

> On May 5, 2012, Jill purchased equipment for $40,000 to be used in her business. She did not elect to expense the equipment under Section 179 or bonus depreciation. On January 1, 2017, she sells the equipment to a scrap metal dealer. What is the cost

> Mandy, a CPA, flew from Raleigh to Seattle to attend an accounting conference that lasted four days. Then she took three days of vacation to go sightseeing. Mandy’s expenses for the trip are as follows: Airfare ……………………………………………….$625 Lodging (7 days

> Atlas, a financial consultant, had the following income and expenses in his business: Fee Income $235,000  Expenses:    Rent Expense  18,000   Penalties assessed by the SEC  2,500   Office expenses  6,000   Supplies 

> Which of the following is not a “trade or business” expense? a. Interest on investment indebtedness. b. Property taxes on business equipment. c. Depreciation on business property. d. Cost of goods sold

> Trade or business expenses are treated as a. A deduction for AGI. b. An itemized deduction if not reimbursed. c. A deduction from AGI. d. A deduction from AGI limited to the amount in excess of 2% of AGI.

> Generous Corporation provides a SIMPLE plan for its employees. Under the plan, employees can contribute up to 6% of their salary and Generous Corporation will match each employee’s contribution up to 3% of the employee’s salary. Erika is an employee of

> Which of the following is true regarding SEPs? a. The plan cannot discriminate in favor of highly compensated employees. b. Deductible contributions cannot exceed the lower of 15% of the employee’s compensation or $54,000. c. Self-employed individuals c

> Thomas is a self-employed plumber under the age of 50. His earnings from self- employment, before the Keogh deduction but after deducting half of the self-employment tax, are $80,000. What is his deductible Keogh contribution for 2017? a. $54,000. b.

> A participant in a 401(k) plan under the age of 50 may contribute up to what amount in 2017? a. $5,500. b. $12,500. c. $18,000. d. $54,000.

> To obtain and retain qualified status, a pension or profit-sharing plan must not discriminate in favor of highly compensated employees, who include: a. Employees who own more than 5% of the corporation’s stock. b. Employees who received more than $100,

> A qualified pension plan provides significant tax benefits to both employers and employees including: a. Employer contributions are not treated as compensation to the employee. b. Earnings from the investments held in the plan are tax-deferred. c. No ta

> A participant in a Keogh plan over the age of 50 may contribute up to what amount in 2017? a. $6,500. b. $24,000. c. The lower of $54,000 or 25% of earned income from self-employment. d. The greater of $54,000 or 25% of earned income from self-employmen

> Sanjay purchased a single life annuity contract for $200,000. The contract will pay $15,000 per year beginning in 2017 for the remainder of his life and has an expected return of $330,000. What amount of taxable income must Sanjay report in 2017? a. $

> June, age 76, and Augustus, age 78, are married. They purchased a single life annuity contract that will pay $1,500 per month for the life of June. The expected return on the contract: a. Is $190,800. b. Is $214,200. c. Is $405,000. d. Cannot be deter

> Julio is 62 and single. He purchased a single life annuity contract that will pay him $1,000 a month for life with a minimum payout of 10 years. His expected return on the contract: a. Is $120,000. b. Is $270,000. c. Is $282,000. d. Cannot be determin

> Regarding a Coverdell Education Savings Account: a. Distributions are tax-free to the beneficiary if they are used for his or her qualified education expenses. b. Qualified education expenses include required tuition, fees, books, supplies, and equipme

> Withdrawals from a Roth IRA are: a. Subject to the required minimum distribution rules. b. Taxable if made after the five-tax-year period beginning with the first tax year in which a Roth contribution was made. c. Deemed to come first from contribution

> Juanita, age 62, retired in 2017. During the year, she received distributions of $9,000 from her IRA. She made nondeductible contributions of $20,000 to the IRA in prior years and has never received a nontaxable distribution. As of December 31, 2017,

> Which of the following statements is true? a. Only employers can establish tax-deferred retirement plans. b. Generally, plan distributions are taxable if the contributions were made with untaxed dollars. c. The donor and the beneficiary of a retirement

> Mark, who is single, must start making distributions from his pension plan beginning April 1, 2017. At the end of 2016 when Mark was 71 years old, the plan had a balance of $220,000. He will use a single life expectancy. What amount must Mark take as

> If a qualified pension plan is being distributed using joint life expectancy: a. The taxpayers cannot choose to refigure their life expectancy. b. If the beneficiary dies, no adjustment of the denominator used to calculate minimum distributions is requ

> Juan is single and retired on January 1, 2017 at age 62. He is entitled to receive monthly payments of $1,500 over his life from his employer’s qualified pension plan. The payments began January 1, 2017. He contributed $71,500 to the plan prior to his

> Vanessa and Martin file a joint return for 2017. They have one child age 12. They have combined AGI of $202,000 in 2017. What is their maximum permitted contribution to a Coverdell Education Savings Account for 2017? a. $0. b. $800. c. $1,200. d. $2,

> Without regard to AGI limitations, what is the maximum contribution permitted to a Coverdell Education Savings Account in 2017? a. $500 b. $2,000 c. $5,500 d. The lower of $5,500 or 100% of compensation

> Vickie is single and age 43. She reported AGI of $123,000 in tax year 2016. She is an active participant in her employer’s pension plan. What is the maximum Roth IRA contribution she can make in 2017? a. $0. b. $2,200. c. $3,300. d. $5,500.