tax test 3 - The gain from the sale of property that...

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The gain from the sale of property that produces portfolio income (e.g., stocks and bonds) is classified as passive income. Answer: True False The gain from the sale of property that produces portfolio income is also classified as portfolio income. Correct Marks for this submission: 2/2. Question 2 Marks: 2 Which of the following statements is correct? Choose one answer. a. Hobby expenses are always fully deductible. b. The financial status of the taxpayer is not considere in for profit. c. The deduction for the allowed hobby expenses is a percent floor. d. Hobby expenses that are deductible without referen designed to produce income, such as certain taxes, re Hobby expenses are generally deductible only to the extent of income produced by the activity. The financial status of the taxpayer is considered in determining whether activities are engaged in for profit. The deduction for the allowed hobby expenses is an itemized deduction subject to the 2 percent floor. Correct Marks for this submission: 2/2. Question 3 Marks: 2 Which of the listed dispositions for a passive activity allow a taxpayer to keep the suspended losses from the disposed activity and utilize them on a subsequent taxable disposition? Choose one answer. a. Disposition of death. b. Disposition by gift. c. All of the above.
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d. None of the above. Nontaxable exchange. Correct Marks for this submission: 2/2. Question 4 Marks: 2 Farmers may carryback an NOL for three years. Answer: True False Correct Marks for this submission: 2/2. Question 5 Marks: 2 When a taxpayer incurs an NOL in 2011, that is not attributable to a casualty or theft loss, the taxpayer may: Choose one answer. a. Carry the NOL forward instead of back. b. Carry the NOL back three years. c. Carry the NOL back five years. d. All of the above. Correct Marks for this submission: 2/2. Question 6 Marks: 2 The manufacturing deduction in 2011 is based on what percentage? Choose one answer. a. 9% b. 6% c. 3% d. None of the above.
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In 2011, it is 9%. Incorrect Marks for this submission: 0/2. Question 7 Marks: 2 Disaster area losses are carried forward for an additional five years beyond ordinary casualty losses. Answer: True False Disaster area losses may be carried back to the tax year preceding the year of loss. Correct Marks for this submission: 2/2. Question 8 Marks: 2 Jim owns four separate activities. He elects not to group them together as a single activity under the “appropriate economic unit” standard. Jim participates for 140 hours in Activity A, 130 hours in Activity B, 140 hours in Activity C, and 100 hours in Activity D. He has one employee who works 135 hours in Activity D. Which of the following statements is correct? Choose one answer.
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This note was uploaded on 11/26/2011 for the course INCOME TAX 4404 taught by Professor Bulie during the Spring '11 term at University of Minnesota Duluth.

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tax test 3 - The gain from the sale of property that...

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