1. In 2014, James invested $30,000 in a cattle ? feeding partnership that used non recourse notes to purchase $70,000 of feed, which was used to feed the cattle and expensed. If James?s share of the expense was $50,000, what is the most that James can deduct in 2014?;a. $20,000 b. $30,000 c. $50,000 d. $70,000;2. Pamela, a corporate executive, exercised an incentive stock option (?ISO?) granted by Pamela?s employer to purchase 10,000 shares of the corporation?s stock at the option price of $1 per share (i.e., the exercise price was $1 per share). The stock is freely transferable. At the time the option was exercised, the stock was selling for $21 per share. What is the AMT adjustment that results from Pamela exercising the ISO (assume that Pamela will NOT dispose of any of the stock during the year)?;a. $210,000 b. $200,000 c. $10,000 d. $0;3. Stephanie, a single parent, lives in an apartment with Stephanie?s three minor children each under age 11, whom Stephanie supports. For 2014, Stephanie will have AGI and earned income of $22,000. Calculate the amount, if any, of Stephanie?s earned income credit.;a. $0 b. $3,000 c. $5,265 d. $6,143;4. Jonathan and Cristine are married and file a joint return. In 2014, Cristine worked full time and earned $20,000, while Jonathan worked full time and earned $16,000. Assume their 2014 AGI equaled $36,000. Assume they incurred $8,000 of child care expenses during 2014 for their two dependent children, Jeanette and Sascha (who are 2 and 4 years old, respectively). What is their child and dependent care credit amount?;a. $8,000 b. $6,000 c. $2,000 d. $1,440;5. In 2007, Mayelin received stock from Sandra worth $20,000 at the time of the gift. At the time of the gift, Sandra?s adjusted basis in the stock was $30,000. What is the gain or loss that Mayelin should report for 2014 if she sold the stock to Dy in 2014 for $25,000 (ignore any gift tax that may have been paid on the transfer from Sandra to Mayelin)?;a. There is no gain or loss b. $25,000 gain c. $5,000 gain d. $5,000 loss;6. Now, assume that in the previous question Mayelin sold the stock to Dy for $40,000 (instead of $25,000). What is the gain or loss that Mayelin should report (again, ignore any gift tax that may have been paid on the transfer from Sandra to Mayelin)?;a. There is no gain or loss b. $10,000 gain c. $20,000 gain d. $40,000 gain;7. Now, assume that in Question 5 Mayelin sold the stock to Dy for $10,000 (instead of $25,000). What is the gain or loss that Mayelin realized on the sale to Dy (again, ignore any gift tax that may have been paid on the transfer from Sandra to Mayelin)?;a. There is no gain or loss b. $10,000 loss c. $20,000 loss d. $25,000 gain;8. Jhoslen traded in office equipment with an adjusted basis of $20,000 (and value of $40,000) for other (like-kind) office equipment then valued at $35,000. Jhoslen also received $5,000 in cash as part of the deal. What was Jhoslen?s recognized gain on the exchange, if any?;a. $40,000 b. $20,000 c. $5,000 d. $0;9. Thomas traded in computer equipment with an adjusted basis of $15,000 (and a value of $15,000) for other (like-kind) computer equipment then valued at $13,000. Thomas also received $2,000 in cash as part of the deal. What was Thomas?s realized gain on the exchange, if any?;a. $0 b. $2,000 c. $13,000 d. $15,000;10. In 2014, Kayanna and Damian sold a house to Guerol for $850,000. Prior the 2014 sale, neither Kayanna nor Damian had ever excluded a gain from the sale of a personal residence. Kayanna and Damian had lived in the house for the last six years and used it exclusively for personal purposes. Kayanna and Damian had purchased the house for $100,000. Kayanna and Damian started living in the house immediately after purchasing it and never made any capital improvements to the house or took any depreciation (or other deductions) against it. Assume there were no selling expenses. How much of a gain did Kayanna and Damian realize on the sale to Guerol (assume that Kayanna and Damian are married and file a joint return)?;a. $0 b. $250,000 c. $500,000 d. $750,000;Please note that they only recognized a $250,000 taxable gain because of the $500,000 homeowners exclusion). The question says realized gain which I interpret to mean actual gain, not taxable gain.
Paper#19355 | Written in 18-Jul-2015Price : $37