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Practice quiz 1. (TCO E) For federal tax purposes, royalty income that is not derived in the ordinary course of a business is classified as: (Points...

Can you help me identifying the incorrect answer, or can you poitning in the right direction. I have taken the quiz and I answered 6 correct questions out of 8.
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Practice quiz 1.  (TCO E) For federal tax purposes, royalty income that is not derived in the ordinary course of a business is classified as:  (Points : 5)  portfolio income. active income. passive income. None of the above 2.  (TCO F) When comparing corporate and individual taxation, the following statements are true, except: (Points : 5)  Individuals have exemptions and a standard deduction; corporations do not. Both corporate and individual taxpayers may have a long-term capital loss carryforward. All taxpayers may carry net operating losses back two years, forward 20 years. Both types of taxpayers have percentage limitations on the charitable contribution deduction, coupled with a carryover of the excess contribution. 3.  (TCO H) Al and Amy file a joint return for the 2007 tax year. Their adjusted gross income is $80,000. They had a net investment income of $8,000. In 2007, they had the following interest expenses: Personal credit card interest: $4,000 Home mortgage interest: $8,000 Investment interest (on loans used to buy stocks): $10,000 What is the interest deduction for Al and Amy for the 2007 tax year?  (Points : 5)  $8,000 $12,000 $16,000 $18,000 4.  (TCO B) A contribution made to the following donee is not deductible.  (Points : 5)  Boy Scouts of America Oxford University, England Society for the Prevention of Cruelty to Animals Michigan State University California State Fair (an activity of the State of California) 5.  (TCO A) The following taxes were paid by Tim: Real estate taxes on his home: $2,000 State income taxes: $900 State gasoline tax (personal use of automobile): $150 In itemizing his deductions, what is the amount that Tim may claim as a deduction for taxes?  (Points : 5)  $2,000 $2,900 $3,050 $0 6.  (TCO F) Hoover, Inc. had gross receipts from operations of $230,000, operating and other expenses of $310,000, and dividends received from a 45 percent-owned domestic corporation of $120,000. Hoover's tax position for the year is:  (Points : 5)  $8,000 taxable income. $56,000 net operating loss.
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$40,000 taxable income. $80,000 net operating loss. 7.  (TCO G) All of the outstanding stock of a closely held C corporation is owned equally by Mary Smith and Bob Bufusno. In 2011, the corporation generates taxable income of $30,000 from its active business activities. In addition, it earns $40,000 of interest from investments and incurs a $50,000 loss from a passive activity. How much income does the C corporation report for 2011?  (Points : 5)  $10,000 of portfolio income $0 $40,000 of portfolio income None of the above 8.  (TCO G) Steve, who is single, has $100,000 of salary, $10,000 of income from a limited partnership, and a $25,000 passive loss from a real estate rental activity in which he actively participates. His modified adjusted gross income is $100,000. Of the $25,000 loss, how much is deductible?  (Points : 5)  $25,000 $10,000 $15,000 $0 9.  (TCO F) Pam owns a sole proprietorship, and Kevin is the sole shareholder of a C (regular) corporation. Each business sustained a $16,000 operating loss and a $2,500 capital loss for the year. Evaluate how these losses will affect the taxable income of the two owners?  (Points : 17)  10.  (TCO G) Briefly (1) define and (2) discuss the purpose and impact of each of the following: a. at-risk rules b. suspended passive activity losses c. material participation  (Points : 18) 
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