tax7-9 - Marks: 1 During 2011, Tommys home was burglarized....

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

View Full Document Right Arrow Icon
Marks: 1 During 2011, Tommy’s home was burglarized. Tommy had the following items stolen. -A block of securities worth $20,000. Tommy purchased of securities three years ago for $8,000. -A block of securities worth $30,000. Tommy purchased the securities for $24,000 two years ago. Tommy’s homeowners policy had an $80,000 deductible clause for thefts. How much is Tommy’s theft loss for 2011? Choose one answer. a. $50,000 b. $32,000 c. $44,000 d. None of the above. Incorrect Marks for this submission: 0/1. Question 2 Marks: 1 All casualty and theft losses are deductible if incurred in a trade or business or in connection with an investment. Answer: True False Losses caused by a taxpayer's willful act or willful negligence are not deductible. Incorrect Marks for this submission: 0/1. Question 3 Marks: 1 Which of the following is not deductible? Choose one answer. a. NOLs b. Expenses incurred for the production of income. c. Hobby expenses in excess of hobby income.
Background image of page 1

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

View Full DocumentRight Arrow Icon
d. All of the above. Correct Marks for this submission: 1/1. Question 4 Marks: 1 Billy Ray owns several parcels of rental real estate, and he actively participates in managing the properties. His total loss from these activities in 2011 is $30,000. Assuming that his AGI for 2011 is $110,000, what is the allowable deduction from these properties in 2011? Choose one answer. a. $0 b. $15,000 c. $20,000 d. $30,000 Four-fifths of the $25,000 exception to the passive loss rules is allowed based on his AGI. Correct Marks for this submission: 1/1. Question 5 Marks: 1 Tammy has the following items for the current year: Nonbusiness capital gains $10,000 Nonbusiness capital losses (2,000) Interest income 7,000 Itemized deductions (none of the amount realized from a casualty loss) (9,000) In calculating Tammy's net operating loss, and with respect to the above amounts only, what amount must be added back to taxable income (loss)? Choose one answer. a. $0 b. $2,000
Background image of page 2
d. $6,000 $9,000 – (7,000 + (10,000 – 2,000)) = ($6,000). Therefore, nothing is added back. Incorrect Marks for this submission: 0/1. Question 6 Marks: 1 The Code Section 199 manufacturing deduction cannot exceed 50% of W-2 wages paid by the taxpayer during a tax year. Answer: True False Correct Marks for this submission: 1/1. Question 7 Marks: 1 Insurance proceeds received in the year of the casualty in a business casualty loss do not reduce the amount of the loss. Answer: True False Any insurance proceeds will reduce the amount deductible. Correct Marks for this submission: 1/1. Question 8 Marks: 1 Hobby expenses are generally deductible only to the extent of the income generated by the activity. Answer: True False Correct Marks for this submission: 1/1. Question
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.

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.

Page1 / 30

tax7-9 - Marks: 1 During 2011, Tommys home was burglarized....

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