Income tax quizzes 4-6 - Marks: 1 Advance rent must be...

Info iconThis preview shows pages 1–3. Sign up to view the full content.

View Full Document Right Arrow Icon
Marks: 1 Advance rent must be included in rental income in the year received regardless of the period covered or the accounting method used. Answer: True False This is prepaid rent. * This question has been adapted from the IRS Examinations. Correct Marks for this submission: 1/1. Question 2 Marks: 1 Paul Penn, a cash basis taxpayer, received a desk in exchange for bookkeeping services. He should report the fair market value of the desk as income. Answer: True False This is an example of bartering. * This question has been adapted from the IRS Examinations. Correct Marks for this submission: 1/1. Question 3 Marks: 1 Todd, a politician, uses political contributions to pay his household electric bill. The amount used to pay the electric bill is taxable income to Todd. Answer: True False Correct Marks for this submission: 1/1. Question 4 Marks: 1 Rick Rambler is divorced from his wife, who has custody of their child. The divorce decree provides that Rick must pay his former wife $15 per week toward the child's support, which he did throughout the calendar year. The decree also provides that he may claim the child as his exemption. Rick's former wife can prove that during the year she contributed $7,500 toward the support of the child. Rick is entitled to claim the exemption for the child. Answer: True False * This question has been adapted from the IRS Examinations. Correct Marks for this submission: 1/1. Question 5 Marks: 1 Tim Thayer, a lessee of part of an office building from an unrelated lessor, made permanent improvements which had a useful life longer than the remaining term of the lease. The improvements are not recovery property. Tim may amortize the cost of the improvement over the remaining term of the lease.
Background image of page 1

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

View Full DocumentRight Arrow Icon
Answer: True False * This question has been adapted from the IRS Examinations. Incorrect Marks for this submission: 0/1. Question 6 Marks: 1 Dan Drew owned two shares of a corporation's common stock. He paid $60 for one share and $30 for the other share. The corporation declared a stock dividend which gave stockholders two new shares of common stock for each share they held. After the distribution, Dan owns six shares of stock with an adjusted basis of $15 each. Answer: True False There are two lots of stock and a basis is determined for each. * This question has been adapted from the IRS Examinations. Correct Marks for this submission: 1/1. Question 7 Marks: 1 Holly and Harp Oaks were divorced in 2009. The divorce decree was silent regarding the exemption for their 12-year-old daughter, June. Holly has legal custody of her daughter and did not sign a statement releasing the exemption. Holly earned $8,000 and Frank earned $80,000. June had a paper route and earned $3,000. June lived with Harp 4 months of the year and with Holly 8 months. Who may claim the exemption for June in 2011? Choose one answer.
Background image of page 2
Image of page 3
This is the end of the preview. Sign up to access the rest of the document.

Page1 / 26

Income tax quizzes 4-6 - Marks: 1 Advance rent must be...

This preview shows document pages 1 - 3. Sign up to view the full document.

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