Take Home Study Exam for Final with solutions

Take Home Study Exam for Final with solutions - FEDERAL...

Info iconThis preview shows pages 1–4. Sign up to view the full content.

View Full Document Right Arrow Icon
FEDERAL INCOME TAXATION ACCT4331 Take Home Study Exam for Final Spring 2008 Name:________________________________ Signature:______________________________ Instructions : This exam is optional and designed to prepare you for the Final. It must be done individually . Clearly mark your answers on BOTH the scantron AND on your test, and do so with a #2 pencil. SHOW ALL WORK to receive credit. Guesses on problems that show no work will be given a zero. All answers must reflect current tax law which we have been referring to this semester. Extra paper can be used and attached if you need any. This exam, and extra sheets you used AND your scantron must be turned in by noon on Friday, May 8 th (late assignments will NOT be accepted for ANY reason – but you can turn them in at MH390A at any time before the deadline). There are 25 MC questions each with a value of 4%, for a total of 100%. Signing this page indicates that you did not cheat in any way including discussing this exam with anyone else in class AT ANY TIME. This take home exam will also be used to calculate your curve on the Final. The formula that will be used to calculate the curve portion of your Final is: (100% - your grade on the Final)*25%*(your grade on the Take Home Exam) Good luck!
Background image of page 1

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

View Full DocumentRight Arrow Icon
1) G had income and expenses as follows for the current taxable year: Total income $32,400 Exclusions (municipal bond interest) 2,000 Deductions for A.G.I. 1,200 Total itemized deductions 9,920 Standard deduction 5,450 Exemption deductions 7,000 What are G’s adjusted gross income and her taxable income, respectively? a. $29,200; $12,280 b. $31,200; $14,680 c. $29,200; $17,050 d. $28,000; $12,680 a. Adjusted gross income is gross income ($32,400 - $2,000 = $30,400) less any deductions for adjusted gross income ($1,200), or $29,200. Taxable income is the adjusted gross income minus the larger of the standard deduction ($5,450) or the itemized deductions ($9,920) and minus the personal and dependency 2) J and Z, husband and wife, created a trust for J’s aging mother, Betty. This year the trust received dividend income of $15,000 and distributed $10,000 to Betty. The taxable income of the trust and Betty is? a. Trust $15,000, Betty $10,000 b. Trust $0, Betty $15,000 c. Trust $5,000, Betty $10,000 d. Trust $15,000, Betty $0 e. None of the above. c. A trust is treated as a separate taxable entity. It is taxed on the taxable income it received but is entitled to a deduction to the extent it distributes it. The trust received $15,000 of taxable dividend income and distributed $10,000 so the trust reports $5,000 ($15,000 - $10,000) of taxable income while Betty reports $10,000 taxable income. Note that all of the taxable income is taxed.
Background image of page 2
3) Barnum and Bailey incorporated their circus this year and elected to be treated as an S corporation. Barnum owns 60% of the corporation’s stock while Bailey owns the remaining 40%. This year, the corporation had net income of $300,000 before the owners took any money out of the business (e.g., before salaries, dividend distributions,
Background image of page 3

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

View Full DocumentRight Arrow Icon
Image of page 4
This is the end of the preview. Sign up to access the rest of the document.

Page1 / 18

Take Home Study Exam for Final with solutions - FEDERAL...

This preview shows document pages 1 - 4. Sign up to view the full document.

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