T12S-Chp-05-2-Homework-Prb-Spring-2012

T12S-Chp-05-2-Homework-Prb-Spring-2012 -...

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f71cef5d4a5914b4e01a4bc02a3be675c4112d18.doc. Page 1 of 4 First & Last Name: Homework-Chapter 5. 1 Barb is a CPA. She operates a tax practice. During the year, she spent the following: Annual CPA license renewal fee: $500 Fees for CPE courses to meet State CPA Board Requirement: $3,000 Tuition for first semester in law school - attending night school: $8,000 How much of these expenses should Barb deduct on her federal income tax return? a. $500 b. $3,000 c. $3,500 d. $8,000 e. Other 2 A single taxpayer had the following income and expenditures in the current year. Wages earned $60,000 Deductible contribution to IRA (5,000) NC Income Tax (4,000) Charity (3,000) Union Dues (400) What is the taxpayer’s adjusted gross income? a. $60,000 b. $55,000 c. $54,600 d. $50,600 e. other 3 Which one of these types of deductions is not deductible in arriving at adjusted gross income? a. Alimony b. Exemption c. Expenses of rental property d. IRA Contributions 4 Mr. and Mrs. Smith have combined salaries of $60,000. Their only expenditures affecting the tax return are state income taxes of $6,000 and real estate taxes amounting to $2,000. They have two small children whom they support, and file a joint return. They have taxable income for the current year (2010) of: a. Not more than 36,000 b. More than $36,000, but not more than $37,000 c. More than $37,000, but not more than $38,000 d. More than $38,000 5 Jan started two corporations on January 1, 2010: (1) Computer Repair Corporation and (2) a Web Consulting Corporation. She elected S status for the web consulting corporation. The income statements for these two corporations are shown below for 2010. Computer Repair Web Consulting [C Corp] [S Corp] Revenue $100,000 $200,000 Salary to Jan (owner) (30,000) (80,000) Rent expenses (20,000) (70,000) Other expenses (10,000) (10,000) Net income before taxes $40,000 $40,000 Dividends paid to Jan $10,000 $10,000 How much total income does Jan report from these two entities? a. $110,000 b. $160,000 c. $170,000 d. $210,000 e. Other 6 A taxpayer has the following amounts of income and expenses from these investments: Investments Revenue Publications Bought Expense 1. Treasury bonds $1,000 U.S. Bond Newsletter $40 2. General Motors bonds $2,000 Corporate Bond Newsletter $50 3. City of Charlotte Bonds $3,000 Municipal Bond Newsletter $45 What is the amount of the miscellaneous itemized deduction, before considering the 2% threshold? a.
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T12S-Chp-05-2-Homework-Prb-Spring-2012 -...

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