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BUS 168A Final Exam Questions - BUS 168A Final Exam...

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BUS 168A Final Exam December 11 2009 University of California Riverside Prof Weaver Multiple Choice Identify the choice that best completes the statement or answers the question I On February 20 2008 Bill purchased stock in Pink Corporation the stock is not small business stock for 1 000 On May 1 2009 the stock became worthless During 2009 Bill also had an 8 000 loss on S 1244 small business stock purchased two years ago a 9 000 loss on a nonbusiness bad debt and a 5 000 long term capital gain How should Bill treat these items on his 2009 tax return a 4 000 long term capital loss and 9 000 short term capital loss b 4 000 long term capital loss and 3 000 short term capital loss c 8 000 ordinary loss and 3 000 short term capital loss d 8 000 ordinary loss and 5 000 short term capital loss e 8 000 long term capital loss and 6 000 short term capital loss 2 In 2009 Ned and Mary had the following items Salary Personal use casualty gain Personal use casualty loss after 500 floor Other itemized deductions 40 000 10 000 17 000 4 000 Assuming that Ned and Mary file ajoint return determine their taxable income for the current year a 21 300 b 26 000 c 27 200 d 30 200 e None of the above 3 Jack age 30 and married with no dependents is a self employed individual For 2009 his self employed business sustained a net loss from operations of 1 0 000 The following additional information was obtained from his personal records for the year Nonbusiness long term capital gain Interest income Itemized deductions consisting of taxes and interest 2 000 6 000 12 000 Based on the above information what is Jack s net operating loss for the current year ifhe and his spouse file ajoint return a 2 000 b 8 000 c 10 000 d 11 000 e 16 400 4 Steve and Holly have the following items for 2009 Dividend income Interest income Itemized deductions none of the amount resulted from a casualty loss Business capital gains 5 000 7 000 9 000 1 000
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9 In Shelby County the real property tax year is the calendar year The real property tax becomes a personal liability of the owner of real property on January 1 in the current real property tax year 2009 The tax is payable on June 1 2009 On April 30 2009 Julio sells his house to Anita for 230 000 On June 1 2009 Anita pays the entire real estate tax of 7 300 for the year ending December 31 2009 How much of the property taxes may Julio deduct a 0 b 2 380 c 2 400 d 4 920 e None of the above 10 Rick and Carol Ryan married taxpayers took out a mortgage on their home for 160 000 ten years ago In October of the current year when the home had a fair market value of 200 000 and they owed 125 000 on the mortgage the Ryans took out a home equity loan for 110 000 They used the funds to purchase a sailboat to be used for recreational purposes The sailboat does not qualify as a residence What is the maximum amount of debt on which the Ryans can deduct home equity interest a 75 000 b 90 000 c 110 000 d 125 000 e None of the above II Irving invests in vacant land for the purpose of realizing a profit on its appreciation He leases the land during the period he holds it The unadjusted basis of the property is 25 000 and its fair market value is 35
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