Taxation | Accounting homework help

1. (TCO E) For federal tax purposes, the gain from the sale of stocks and bonds is classified as: (Points : 5)

       active income.
       portfolio income.
       passive income.
       None of the above

2. (TCO D) How does the Code define a capital asset? (Points : 5)

       As inventory carried by the taxpayer’s business
       As property used by the taxpayer in his/her business, which is depreciable
       As intangible property owned by the taxpayer, regardless of whether used in his/her business or not
       The Code does not define what a capital asset is, only what it is not.

3. (TCO H) Gary and Tracy file a joint return for the 2012 tax year. Their adjusted gross income is $65,000. They had net investment income of $9,000. In 2012, they had the following interest expenses:

· Personal credit card interest: $3,000

· Home mortgage interest: $8,000

· Interest paid on qualified education loans: $2,000

· Investment interest (on loans used to buy stocks): $10,000

What is the interest deduction for Gary and Tracy for the 2012 tax year? (Points : 5)

       $19,000
       $8,000
       $12,000
       $18,000

4. (TCO B) Unreimbursed expenses of employees are considered to be deductions: (Points : 5)

       for AGI.
       from AGI.
       for or from AGI, depending on the type of expense.
       None of the above

5. (TCO A) Miscellaneous itemized deductions are deductible only: (Points : 5)

       to the extent that in aggregate, they exceed two percent of AGI.
       if the taxpayer takes the standard deduction.
       if they fall below the limit on standard itemized deductions.
       None of the above

6. (TCO E) Josh sold a piece of business equipment that had an adjusted basis to him of $50,000. In return for the equipment, Josh received $60,000 cash and a painting with a fair market value of $20,000 from the buyer. The buyer also assumed Josh’s $25,000 loan on the equipment. Josh paid $5,000 in selling expenses. What is the amount of Josh’s gain on the sale? (Points : 5)

       $50,000
       $105,000
       $75,000
       $60,000

7. (TCO I) Gary and Gerdy Gray purchased a home for $125,000 on September 15, 2010. On October 7, 2011 they were divorced, and as part of the divorce agreement, the home was transferred to Gerda, who sold the home on October 18, 2012 for $350,000. How much can Gerda exclude? (Points : 5)

       $350,000
       $250,000
       $225,000
       $0

8. (TCO I) Under the accrual method of accounting, income is generally recorded when:(Points : 5)

       the liability arises.
       payment is received.
       the expense is actually incurred.
       revenue is earned.

9. (TCO D) Sean, a calendar year taxpayer, purchased stock on October 18, 2011 for $7,000. The stock became worthless on March 10, 2012. What is Sean’s loss in 2012?(Points : 5)

       $7,000 long-term capital loss
       $7,000 short-term capital loss
       No loss
       $7,000 itemized deduction for investments

10. (TCO A) Which of the following is not permitted to “practice before the IRS”? (Points : 5)

       Attorney
       CPA
       Bookkeeping service
       Enrolled agent

11. (TCO F) Trade or business expenses are only deductible if they are: (Points : 5)

       necessary and ordinary.
       reasonable in amount.
       not capital in nature.
       All of the above

12. (TCO A) The art of using existing tax laws to pay the least amount of tax legally possible is known as: (Points : 5)

       tax evasion.
       tax avoidance.
       tax elusion.
       None of the above

13. (TCO C) In return for $1,000, Mr. Hand cancels Mr. Sandwich’s debt of $4,000. The cancellation is not a gift, and Mr. Sandwich is neither insolvent nor bankrupt. Which of the following statements is correct? (Points : 5)

       Mr. Hand has $1,000 taxable income.
       Mr. Sandwich has $3,000 of taxable income.
       Mr. Sandwich has $4,000 of taxable income.
       Neither Mr. Hand nor Mr. Sandwich has any taxable income from this transaction.

14. (TCO B) Mark Mayer, a cash basis taxpayer, leased property on June 1, 2012 to Perry Purly at $325 a month. Perry paid Mark $325 as a security deposit, which will be returned at the end of the lease. In addition, Perry paid $650 in advance rent, which is to be applied as rent to the last two months in the lease term. The lease is to run for a two-year period. What is Mark’s rental income for 2012? (Points : 5)

       $1,950
       $2,275
       $2,600
       $2,925

15. (TCO G) On June 3, 2012, Leon Wren, an electrician, was injured in an accident during the course of his employment. As a result of injuries sustained, he received the following payments during 2012:

· Damages for personal injuries: $8,000

· Worker’s compensation: $3,000

· Reimbursement from his employer’s accident and health plan for medical expenses paid by Wren: $1,200

The amount to be included in Wren’s 2012 gross income should be: (Points : 5)

       $0.
       $1,200.
       $3,000.
       $12,200.

16. (TCO F) Hobby expenditures are deductible to the extent of: (Points : 5)

       total individual gross income.
       hobby gross income.
       trade or business gross income.
       nonbusiness gross income.

Image text transcribed for accessibility: For federal tax purposes, the gain from the sale of stocks and bonds is classified as: How does the Code define a capital asset? Gary and Tracy file a joint return for the 2012 tax year. Their adjusted gross income is $65,000. They had net investment income of $9,000. In 2012, they had the following interest expenses: What is the interest deduction for Gary and Tracy for the 2012 tax year? Unreimbursed expenses of employees are considered to be deductions: Miscellaneous itemized deductions are deductible only: Josh sold a piece of business equipment that had an adjusted basis to him of $50,000. In return for the equipment, Josh received $60,000 cash and a painting with a fair market value of $20,000 from the buyer. The buyer also assumed Josh’s $25,000 loan on the equipment. Josh paid $5,000 in selling expenses. What is the amount of Josh’s gain on the sale? Gary and Gerdy Gray purchased a home for $125,000 on September 15, 2010. On October 7, 2011 they were divorced, and as part of the divorce agreement, the home was transferred to Gerda, who sold the home on October 18, 2012 for $350,000. How much can Gerda exclude? Under the accrual method of accounting, income is generally recorded when: Sean, a calendar year taxpayer, purchased stock on October 18, 2011 for $7,000. The stock became worthless on March 10, 2012. What is Sean’s loss in 2012? Which of the following is not permitted to “practice before the IRS”? Trade or business expenses are only deductible if they are: The art of using existing tax laws to pay the least amount of tax legally possible is known as: In return for $1,000, Mr. Hand cancels Mr. Sandwich’s debt of $4,000. The cancellation is not a gift, and Mr. Sandwich is neither insolvent nor bankrupt. Which of the following statements is correct? Mark Mayer, a cash basis taxpayer, leased property on June 1, 2012 to Perry Purly at $325 a month. Perry paid Mark $325 as a security deposit, which will be returned at the end of the lease. In addition, Perry paid $650 in advance rent, which is to be applied as rent to the last two months in the lease term. The lease is to run for a two-year period. What is Mark’s rental income for 2012? On June 3, 2012, Leon Wren, an electrician, was injured in an accident during the course of his employment. As a result of injuries sustained, he received the following payments during 2012: Hobby expenditures are deductible to the extent of:

Continue to order Get a quote

Our guarantees

Delivering a high-quality product at a reasonable price is not enough anymore.
That’s why we have developed 5 beneficial guarantees that will make your experience with our service enjoyable, easy, and safe.

Money-back guarantee

You have to be 100% sure of the quality of your product to give a money-back guarantee. This describes us perfectly. Make sure that this guarantee is totally transparent.

Zero-plagiarism guarantee

Each paper is composed from scratch, according to your instructions. It is then checked by our plagiarism-detection software. There is no gap where plagiarism could squeeze in.

Free-revision policy

Thanks to our free revisions, there is no way for you to be unsatisfied. We will work on your paper until you are completely happy with the result.

Privacy policy

Your email is safe, as we store it according to international data protection rules. Your bank details are secure, as we use only reliable payment systems.

Fair-cooperation guarantee

By sending us your money, you buy the service we provide. Check out our terms and conditions if you prefer business talks to be laid out in official language.

Custom-written and plagiarism-free papers: Our authors create their work from scratch. Before presenting them to clients, we routinely verify them for signs of plagiarism. Our quality assurance group also double-checks and fixes any grammatical errors, assuring that all of our authors adhere to the same standards of writing.
The significance of timely delivery cannot be overstated, and we consistently strive to meet or exceed our clients' deadlines. Regardless of the short time frame, you can count on our writers to get the job done. We always have a team of writers ready to go, even if the deadline is only six hours away.
Customer Satisfaction: Our customer service representatives are the best in the business and have a wealth of knowledge in dealing with clients. All our customer service representatives are trained to listen and reply promptly until you are satisfied with their service. To ensure you're happy, our expert writers will strictly follow the criteria to generate a special report. Our customer service may be contacted by chat, email, or phone. In addition, we provide round-the-clock assistance to all of our clients.
Confidentiality: Our systems are safe, and your information is always protected. We're constantly looking for new facts when it comes to finishing your work. We use a safe and secure payment channel. Since our ordering process is completely anonymous, you don't have to provide any credit card information to place a purchase with us.
Highly Trained Authors: Our writers have received extensive training and are committed to delivering only the best papers. They are fluent in APA, MLA, HARVARD, IEEE, CHICAGO, and AMA referencing styles. To meet your expectations, our skilled writers always pay close attention to your instructions.
Lowered prices: We have set prices that are already discounted. Our prices are the best and affordable for all our esteemed customers.

Taxation | Accounting homework help

Recent Posts

Recent Comments

Calculate the price of your order