TAX practice question.docx

TAX practice question.docx - QUESTION 1 W JB is employed at...

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Unformatted text preview: QUESTION 1 W... JB is employed at Zed Inc. as a mid level manager. Zed grants stock option compilation t0 mes: ofits employees. In 2012, JE exercised 10,000 options that were gramedto her in 2009. At. the time ofthe grant in 2009, Zed‘s stonkprioe was 531501511“. J'B's exercise price on these options is $35.00 per share. In 2012 at the timetha‘t .l'B exercised her options, the stock’s price was $51.0lllshare. Use the following information to answerquestinns 1k] 7. Assume that the options are non qualified, how much taxable income didJB recognize in 2009 when the opfions were grantedto her? 0 0, she recognized no income in 2009 0 35,000 0 100,000 0 155,000 Quasnonz ‘ 10 points Amuming the options are non qualified stock options, how much expense did Zed Inc. deduct in its 2009 tax return? 0 None, there was no tax deduction in 2000 for Zed. 0 35,000 0 160,000 0 195,000 oussnona ‘ 10 points m Assuming that these are non qualified options, how much taxable income did JB recognize in 2012? O 0, JB did not recognize any taxable income in 2012. 0 35,000 ° 100,000 0 195,000 QUESTION 4 ‘ 10 points aved Afiuming that these are non qualified options, what is JB‘s initial basis in the 10,000 shares she acquired when she exercised the options? 0 100,000 0 195,000 0 350,000 a 510,000 QUESTION 5 ‘ 10 points Assuming that these are QUALiFIED options. how much did Zed deduct in 2012 when JB exercised the options? ° 0, there was no tax deduction for Zed in 2012. 0 35,000 0 160,000 0 105,000 QUESTION 0 10 mm aved Assume that these are QUALIFIED options and assume further that JE sold the 10,000 shares acquired in 2013 for $60 per share. How much gain or' 055 must JE recognize as a result of the sale of the shares? 0 90,000 ordinary income 0 00,000 capital gain 0 250,000 ordinary income ° 250,000 capital gain QUESTION 1 10 pm, w Assume that these are non qualified options and that, tollawing GAAF'. Zed recognized $150,000 in compensation expense in its 2009 income statement. Which of the following statements is true? O This would result in a positive book to tax permanent difference of $150,000 in 2009. O This would h_ot result in any book to tax difference in 2009 becaus- JB had not yet exerised the options. 0 This would result in a positive book to tax [Evan-m difference of $150,000 in 2009. (:1 None of the above are correct. QUESTION 0 10 points w Mr. Smart incurred $2,500 in employee business expenses (not meals or entertainment] this year. He was Lot reimbursed by his mnployer and he lternlzes deductions, has no other miscellaneous deductions and his A61 is $130,000 and his MTR is 28%? What is the after—tax cost to Mr. Smart ofthese expenses? 0 2,500 Q. 1000 Q. 700 Q o QUESTION 9 10 point: Mr. Smart incurred $2,500 in employee business exp-ses (not meals or Itertainrnenlj this year. He was reimbursed by his employer and he ltemizes deductions, has no other miscellaneous deductions and his AG] is $130,000 and his MTR. is 28%? What is the after—tax cost to Mr. Smart ofthese expenses? Q 2,500 Q 1.300 Q 700 00 QUESTION 10 10 point; Mr. Smart incurred $2,000 in unreimhursed employee business expenses (not meals or entertainment) this year. He has no other miscellaneous deductions, but his other itemimd deductions (taxes, interest and charity) total 9,000. His AG] is $25,000, he will file single, andhis MTR is 15%? What is N13. Smem's total deductible itemized deductions? Q 11,000 a 10,500 Q 10,275 0 none of the above Quesnon 11 10 point: Adam Ableguy's income includes: salary: 86,000; taxable interest income: 400; short-term capital gain: 2,700; long-term capital lossflnss: (7,000}. Adam files single. What is Adam’s AGI‘? 9 55,400 Q. 09,100 Q. 512,100 C. none of the above QUESTION 12 10 points Adam Ableguy’s income includes: salary: 75,000; qualified dividends: 1,000; short-term capital gain: 2,000; share of husiness partnership loss: (15,000}. Adam does NOT participate in the business partnership (thus, it is a passive activity for him). Adam files single. What is Adam’s AGI‘? o 70,000 Q. 63,000 Q. 77,000 C: none of the abtwe ouesrtonta ‘ 1Dpaints Adam Ableguy's income includes: salary: 64,000; taxable interest income: 1,000; short-tenn capital gain: 2,700; share of business partnership #1 oss: (15,000), share of business partnership #2 income: 6,000. Adam does NOT participate in either of the business partnerships (thus, they are passive activitiesfor him). Adam files single. What is Adam’s AG]? Q 50,700 0 05,000 a 07,700 0 70,700 QUESTION 14 10mm Adam Ableguy's 2014 income includes: salary: 56,000; taxahle interest income: 1,300; short-term capital gain: 2,700. Adam is single, has no WHEN 53 does not itemize deductions. What is Adam’s taxable income? a 00,000 0 53,000 0 40,050 0 none of the above auesnon 15 ‘ 10 mm, m Adam and Abby Ahleguy's 2014 income includes: Adam's salary: 58,000; Ahhy's salary: 62,000: taxable interest income: 1,300; long-term capital gain: 2,700; Adam's share of ahusiness partnership loss: (7,000). Adam does NOT participate in the business partnership (thus, it is apassive activity for him). Adam and Abby have 15,500 in itemized deductions and will file ajuint return. They have no dependents. What is their AGI‘? 0, 124,000 0, 117,000 a 100,200 0 101,200 aussrtonta ‘ 101mm: w Adam and Ahhy‘s Ahleguy‘s 2014 income includes: Adam's salary: 58,000; Ahhy's salary: 62,000; taxable interest income: 1,300; short-term captE gain: 2,700; Adam's share of a business partnership loss: (7,000). Adam does NOT participate in the business partnership (thus, it is a passive activity for him). Adam and Abby have 15,800 in itemized deductions. Theywill file a joint return andhave 3 dependent children. What is their 2014 taxable income? 0 100,200 0 90,050 0 33,450 0 none of the above QUESTION 17 ‘ 10 points Linda Lover-1y pumhasedan annuitycfl'nmet 10 years ago for $120,000. In Jammy 2014,01: began muting a monthly 52,000 payment 0m will continue For the 10:10th. e. wen expectancy under ms! regulations. she can expect to live fix 15 me years. What is 1m 2014 taxable income aunt theannuity? 0 0,000 “10,000 0 24,000 0 none of the above QUESTION 13 10 points Save Amer Linda Laverly pumhaseda mutual fund 5 years ago fm’ $50,000. lathe past 5 yes, she received a total ufB,000 in dividends, allafwhich have be- ta-invesledin the m. E2013, 0% said all of harshmes in fliefund fl11$75,000. What is her gain or loss onthe sale nfthemumal fund sham? 0 25,000 with gain 0 17.000 capital gain 0 25,000 lipii'ai gain and 3,000 ordinary income 0 17.000 capital gain and 0.000 ordinary income QUESTION 19 l 10 paints mm In 2014, tThe Buellence Curpuration (a publicly traded corporation] paid its CEO a salary of $2,000,000 and an annual cash bunus of $500,000. fie firms was Easefl on the company attaining predetermined performance goals. Haw much of the CEO‘s 2014 compensation is deductible by Excellence? 0 1,000,000 0 1,500,000 0 2,000,000 0 2,500,000 QUESTION 20 1O paints Salem Mr 81 Mrs Wayne bath work. In 2014, Ihey paid $7,500 in child care for their 5 year old son while they were at work. Mr Wayen earned a salary of $25,000 am Mrs. Wayne earned a salary of 25,000 They have no other irmme. What is meir dependent care credit . 0 2,025 0 1,500 0 1,050 0800 ...
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  • Fall '15
  • monroe
  • Taxation in the United States, Adam

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