Page 1 Question 1.1. (TCO E) For federal tax purposes, income attributable to the direct efforts of the tax payer, such as salary, is classified as:(Points : 5) portfolio income.active income.passive income.None of the above Question 2.2. (TCO D) How does the Code define a capital asset?(Points : 5) Question 3.3. (TCO H) Alex and Amy file a joint return for the 2012 tax year. Their adjusted gross income is $90,000. They had net investment income of $8,000. In 2012, they had the following interest expenses: Personal credit card interest: $5,000Home mortgage interest: $10,000Interest paid on qualified education loans: $2,000Investment interest (on loans used to buy stocks): $10,000What is the interest deduction for Alex and Amy for the 2012 tax year?(Points : 5) Question 4.4. (TCO B) Stock in the ABC Corporation was contributed to a public charitable organization. The basis in the stock was $1,000, but its fair market value was $1,500 at the time of the donation. Indicate the correct income taxtreatment as a result of the donation. The stock was held long-term.(Points : 5) Question 5.5. (TCO A) Frank Fox won $10,000 in a state lottery. He also lost $3,000 at the horse races. On his incometax return, he should report:(Points : 5) $10,000 gross income.$7,000 gross income.$10,000 gross income and $3,000 deduction for adjusted gross income.$10,000 gross income and $3,000 itemized deduction. Question 6.6. (TCO E) Adam sold a piece of business equipment that had an adjusted basis to him of $50,000. In return for the equipment, Adam received $80,000 cash and a painting with a fair market value of $20,000 from the buyer. The buyer also assumed Adam's $25,000 loan on the equipment. Adam paid $5,000 in selling expenses. What is the amount of Adam's gain on the sale?(Points : 5)
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- Winter '11
- Finance, Taxation in the United States