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ACC multiple choice questions




Question;12. Chloe owns 200 shares of TPP stock that she purchased 10 years ago for $1,500. Five years ago, therewas a 3 for 2 stock split and she received 100 additional shares. This year, there was another 3 for 2 stocksplit and she received 150 additional shares. If the stock is currently selling for $10 per share, what is herincome and what is her basis in these last 150 shares?a. $3,000 income, $3,000 basisb. $3,000 income, $1,125 basisc. 0 income, $1,125 basisd. 0 income, $500 basis16. What are Susies deductible moving expenses for 2012 if she spends $4,000 for packing and movinghousehold goods, $1,200 to break the lease on her apartment, and $1,500 to store the household goods for45 days? In April she drove her car 1,400 miles to her new home and spent $250 for motels and $80 formeals while traveling to the new home.a. $4,572b. $5,572c. $6,152d. $7,27225. Research and experimentation expenditures can be:a. Expensed when incurred.b. Amortized over 60 or more months.c. Either (a) or (b).d. Neither (a) nor (b).26. Sheldon had salary income of $40,000. In addition, he had the following gains and losses on hisproperty transactions: Long-term capital gain = $14,000, long-term capital loss = $6,000, short-termcapital gain = $4,000, short-term capital loss = $8,000. If Sheldon has no other income items, what is histotal income before any deductions for the year?a. $44,000b. $47,000c. $48,000d. $52,00027.Cliff owned investment stock purchased three years ago for $16,000 and bonds purchased six monthsago for $9,800. When he needed money recently, he sold the stock for $13,800 and the bonds for $10,100.What is the amount and type of net gain or loss that Cliff will include in computing his taxable income?a. $2,200 long-term capital lossb. $1,900 long-term capital gainc. $1,900 long-term capital lossd. $300 short-term capital gain28. Ginger sold stock that she had purchased five years ago for $15,000 to her brother, Carl, for $12,000.Next month, Carl sold the stock for $11,000. What is the amount and type of gain or loss included inCarls income from this sale?a. 0b. $1,000 short-term capital lossc. $ 1,000 long-term capital lossd. $4,000 short-term capital losse. $4,000 long-term capital loss29.Shawn, a single taxpayer, sold the house he has lived in for seven years for $700,000. He purchasedthe house for $285,000. He made improvements at a cost of $125,000 and paid a $30,000 commission onthe sale. What are Shawns realized and recognized gains on the sale?a. $260,000 realized and recognizedb. $290,000 realized and recognizedc. $260,000 realized and $10,000 recognizedd. $260,000 realized and no gain recognizede. None of the above30. Cal exchanges office furniture (fair market value = $100,000, adjusted basis = $90,000) and abusiness auto (fair market value = $10,000, adjusted basis = $6,000) for fire retardant filing cabinets (fairmarket value = $110,000, adjusted basis = $80,000). How much gain or loss does Cal recognize on theexchange?a. 0b. $4,000 gain on autoc. $10,000 gain on furnitured. $14,000 total gaine. None of the above33. Cal contributes property valued at $50,000 (adjusted basis = $30,000) to a partnership in exchange fora partnership interest valued at $40,000 and $10,000 cash. What is Cals recognized gain or loss on thesetransfers?a. 0b. $4,000c. $10,000d. $20,00035.Soho is a personal service corporation that has $1,100,000 of gross revenue and $1,021,000 ofdeductible expenses? What is its income tax liability?a. $79,000b. $30,494c. $27,650d. $26,860e. $15,11039. Which of the following is not a separately stated item on a partnerships Schedule K?a. A $5,000 long-term capital lossb. $20,000 of Section 1245 recapturec. $3,000 charitable contributiond. $5,000 bond intereste. All are separately stated.41.Stewart is a 30 percent general partner in STP Partnership. His basis in his partnership interest at thebeginning of the year was $40,000. During the year, the partnership reported a $30,000 loss and paid off a$120,000 recourse debt. What is Stewarts year-end basis in his partnership interest?a. 0b. $4,000c. $31,000d. $67,00042.When does a partner recognize gain on a distribution?a. In a liquidating distribution when the fair market value of the property received exceeds partnershipinterest basis.b. In a nonliquidating distribution and the property received exceeds the fair market value of thepartnership interest.c. In a nonliquidating distribution and the cash received exceeds the basis of the partnership interest.d. Gain is not recognized until the property received for the partnership interest is sold.43. Mary purchased 40 percent of an S corporation on February 28 of the current year and sells a 20percent interest on November 30. If the corporation reports $10,000 of income for the year, what incomedoes it report on Marys Schedule K-1.a. $7,534b. $3,014c. $4,000d. $3,184e. None of the above44.What is Cheryls AGI if she has a taxable salary of $34,000, receives $6,000 of alimony and $600 ofinterest on her various savings accounts, contributes $3,000 to her traditional IRA, and paid a $100penalty for cashing in her Certificates of Deposit early?a. $40,000b. $39,600c. $37,500d. $36,90045.John and Mary have two children, Anna, age 16, and Tammy, age 21. Anna works after school andearned $4,000 in 2012. Tammy works 30 hours per week and is a part-time student at the localcommunity college. She earned $8,400 in 2012. Johns mother also lives with them, she receives $7,800in Social Security and $2,000 in interest income from some bonds. John and Mary provide over $10,000towards her support. How many dependency exemptions may John and Mary claim on their joint taxreturn?a. 1b. 2c. 3d. 546.Toni is 61 and blind, her husband, Saul, is 67. What is their standard deduction if they file a joint taxreturn and what is the minimum amount of income they must have to be required to file a tax return,respectively?a. $11,900, $20,650b. $14,200, $20,650c. $14,200, $22,450d. $11,900, $22,45048.The annual gift tax exclusiona. cannot increase beyond $13,000 per donor.b. does not apply to a bargain purchase between related persons.c. applies to future interests.d. removes small gifts from taxation.e. Both (a) and (d).49. Cheryl bought some stock for $110,000. Two years later, she gave the stock to her brother, Harold,when its value was $100,000. Three years later, Harold sold the stock for $105,000. What is the value ofthe gift to Harold, and his gain or loss on the sale, respectively?a. $100,000, 0 gain/lossb. $100,000, $5,000 gainc. $110,000, 0 gain/lossd. $110,000, $5,000 loss50. When will an insurance policy on the decedents life be included in a decedents gross estate?a. The decedent could change the beneficiary.b. The decedent paid the premiums.c. The decedent gave the policy to his daughter two years ago.d. Both (a) and (c).e. Both (b) and (c).


Paper#39093 | Written in 18-Jul-2015

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