tax practice exam 4

tax practice exam 4 - Name: _ Class: _ Date: _ ID: A Sample...

Info iconThis preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon
Name: ________________________ Class: ___________________ Date: __________ ID: A 1 Sample Exam 2 True/False Indicate whether the sentence or statement is true or false. ____ 1. A cash basis taxpayer who charges an expense on a bank credit card is allowed to claim a deduction at that point in time whereas a cash basis taxpayer who charges an expense on a department store credit card is not allowed to claim a deduction until payment is made. ____ 2. The cost of legal advice associated with the preparation of an individual’s Federal tax return is not deductible because it is a personal expense. ____ 3. Legal expenses incurred in connection with rental property are deductions from AGI. ____ 4. The ordinary and necessary expenses for operating an illegal gambling operation (excluding such items as fines, bribes to public officials, illegal kickbacks, and other illegal payments) are deductible. ____ 5. Hobby activity expenses are deductible from AGI to the extent of hobby income. Such expenses not in excess of hobby income are not subject to the 2% of AGI floor. ____ 6. Ralph wants to give his daughter $1,000 for Christmas. As an alternative, she suggests that he pay the property taxes on her residence. If Ralph pays the property taxes, he cannot deduct them but his daughter can. ____ 7. A bad debt deduction can result from a purchased debt instrument. ____ 8. In determining whether a debt is a business or nonbusiness bad debt, the debtor’s use of the borrowed funds is not important. ____ 9. A loss is not allowed for securities that become partially worthless until they are sold. ____ 10. A loss resulting from an accident to an automobile held for personal use is a casualty loss. ____ 11. The amount of the loss for property that is completely destroyed is always the fair market value of the property prior to the destruction. ____ 12. Depreciation expenses on buildings used in a research activity never qualify as research and experimental expenditures. ____ 13. An election to expense, rather than capitalize, research and experimental expenditures can be made each year. ____ 14. Residential rental real estate placed in service after May 12, 1993, has a cost recovery period of 39 years. ____ 15. The basis of property for cost recovery is reduced by the § 179 amount that is disallowed because of the business income limitation. ____ 16. All listed property is subject to the substantiation requirements of § 274. ____ 17. Section 197 intangibles can be amortized over their actual useful life if that life is less than 15 years. ____ 18. Amy lives and works in St. Louis. In the morning she flies to Boston, has a three-hour business meeting, and returns to St. Louis that evening. For tax purposes, Amy was not away from home. ____ 19.
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Image of page 2
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 09/22/2009 for the course ACC 601 taught by Professor Bardon during the Fall '09 term at Utah Valley University.

Page1 / 29

tax practice exam 4 - Name: _ Class: _ Date: _ ID: A Sample...

This preview shows document pages 1 - 2. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online