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Tax quiz 7




Question;Your quiz has been submitted successfully.;Ch. 7 TF;Question 1 0;/ 1 point;Taxpayer?s home was destroyed by a storm in the current year;and the area was declared a disaster area. If the taxpayer elects to treat the;loss as having occurred in the prior year, it will be subject to the 10%-of-AGI;reduction based on the AGI of the current year.;In True;Correct Answer False;View Feedback;Question 2 1;/ 1 point;A corporation which makes a loan to a shareholder can have a;nonbusiness bad debt deduction.;True;False;View Feedback;Question 3 1;/ 1 point;If a taxpayer sells their ? 1244 stock at a loss, all of the;loss will be ordinary loss.;True;False;View Feedback;Question 4 1;/ 1 point;If the amount of the insurance recovery for a theft of;business property is greater than the asset?s fair market value but less than;it?s adjusted basis, a gain is recognized.;True;False;View Feedback;Question 5 1;/ 1 point;Several years ago, John purchased 2,000 shares of Red;Corporation ? 1244 stock from Mark for $40,000. Last year, John sold one-half;of his Red Corporation stock to Mike for $12,000. During the current year, John;sold the remaining Red Corporation stock for $3,000. John has a $17,000 ($3,000;? $20,000) ordinary loss for the current year.;True;False;View Feedback;Ch. 7 MC;Question 6 1;/ 1 point;In 2013, Sarah (who files as single) had silverware worth;$10,000 (basis $6,000) stolen from her home. Sarah?s insurance company told her;that her policy did not cover the theft. Sarah?s other itemized deductions last;year were $2,000. She had AGI of $30,000 last year. In August of 2014, Sarah?s;insurance company decided that Sarah?s policy did cover the theft of the;silverware and they paid Sarah $5,000. Determine the tax treatment of the;$5,000 received by Sarah during 2014.;None of the $5,000 should be included in gross income.;$2,900 should be included in gross income.;$5,000 should be included in gross income.;Last year?s return should be amended to include the $5,000.;None of the above.;View Feedback;Question 7 1;/ 1 point;Jed is an electrician. Jed and his wife are accrual basis;taxpayers and file a joint return. Jed wired a new house for Alison and billed;her $15,000. Alison paid Jed $10,000 and refused to pay the remainder of the;bill, claiming the fee to be exorbitant. Jed took Alison to Small Claims Court;for the unpaid amount and was awarded a $2,000 judgement. Jed was able to;collect the judgement but not the remainder of the bill from Alison. What;amount of loss may Jed deduct in the current year?;$0.;$2,000.;$3,000.;$5,000.;None of the above.;View Feedback;Question 8 1;/ 1 point;John files a return as a single taxpayer. In 2014, he had;the following items;? Salary;of $40,000.;? Loss of;$65,000 on the sale of ? 1244 stock acquired two years ago.;? Interest;income of $6,000.;Determine John?s AGI for 2014.;($5,000).;$0.;$45,000.;$51,000.;None of the above.;View Feedback;Question 9 1;/ 1 point;On June 2, 2013, Fred?s TV Sales sold Mark a large HD TV, on;account, for $12,000. Fred?s TV Sales uses the accrual method. In 2014, when;the balance on the account was $8,000, Mark filed for bankruptcy. Fred was;notified that he could not expect to receive any of the amount owed to him. In;2015, final settlement was made and Fred received $1,000. How much bad debt;loss can Fred deduct in 2015?;$0.;$7,000.;$8,000.;$12,000.;None of the above.;View Feedback;Question 10 1;/ 1 point;In 2014, Theo, an employee, had a salary of $30,000 and;experienced the following losses;Loss from damage to rental property;($10,000);Unreimbursed loss from theft of business computer;(5,000);Personal casualty gain;4,000;Personal casualty loss (after $100 floor);(9,000);Determine the amount of Theo?s itemized deduction from these;losses.;$0.;$2,800.;$2,900.;$4,580.;None of the above.


Paper#39878 | Written in 18-Jul-2015

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