16.which of the following is not an example of a nontaxable like-kind exchange? a. improved real estate for unimproved real estate b. a printer for a computer c. common stock of one company exchanged for common stock of another d. the trade of an apartment building for a store build 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 2. (TCO D) Which of the following is an example of a nontaxable like-kind exchange? (Points : 5) An ice cream making machine for inventory of Rocky Road ice cream Land for an office building Office equipment for a computer All of the above 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: $5,000 • Home mortgage interest: $10,000 • Interest paid on qualified education loans: $2,000 • Investment interest (on loans used to buy stocks): $10,000 What is the interest deduction for Alex and Amy for the 2012 tax year? (Points : 5) $8,000 $12,000 $20,000 $18,000 4. (TCO B) Unreimbursed expenses of employees are considered to be deductions: (Points : 5) for AGI. from AGI. for or from AGI, depending on the type of expense. None of the above 5. (TCO A) Which of the following expenditures is always an itemized deduction for individual taxpayers? (Points : 5) Charitable contributions State and local income taxes Moving expenses All of the above
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) $90,000 $125,000 $80,000 $70,000 7. (TCO I) Gary and Gerdy Gray purchased a home for $125,000 on September 15, 2010. On October 7, 2011 they were divorced, and as part of the divorce agreement, the home was transferred to Gerda, who sold the home on October 18, 2012 for $350,000. How much can Gerda exclude? (Points : 5)$350,000$250,000$225,000$0 8. (TCO I) Under the accrual method of accounting, expenses are generally accrued when: (Points : 5) the expenses are actually incurred. the taxpayer elects to take the deduction. payment is made. None of the above 9. (TCO D) Sean, a calendar year taxpayer, purchased stock on June 18, 2011 for $8,000. The stock became worthless on June 4, 2012. What is Sean’s loss in 2012? (Points : 5) $8,000 short-term capital loss No loss $8,000 long-term capital loss $8,000 itemized deduction for investments 10. (TCO A) Which of the following is a primary source of tax authority? (Points : 5) Revenue ruling Tax Court case Temporary regulation All of the above 11. (TCO F) A nonbusiness bad debt is deductible for tax purposes as a(n): (Points : 5) short-term capital loss.
- Spring '11
- Finance, Taxation in the United States