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Devry ACCT553 week 3 homework

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Question;7-7. Differentiate between;the following: active income, passive income, and portfolio income.7-13. Briefly, what is;material participation"? Why is the determination of whether a;taxpayer materially participates important?7-46. Mary Beth is a CPA;devoting 3,000 hours per year to her practice. She also owns an office building;in which she rents out space to tenants. She devotes none of her time to the;management of the office building. She has a property management firm make all;management decisions for her. During 2012, she incurred a loss, for tax;purposes, of $30,000 on the office building. How must Mary Beth treat this loss;on her 2012 tax return?8-34. Mike and Sally Card;file a joint return for the 2012 tax year. Their adjusted gross income is;$65,000 and they incur the following interest expenses;Qualified education loans: $3,500;Personal loan 1,000;Home mortgage loan 4,000;Loan used to purchase a variety;of stocks;Bonds, and securities 15,000;Investment income and related;expenses amount to $7,000 and $500, respectively. What is Mike and Sally's;interest deduction for the 2012 tax year?8-40. In each of the;following independent cases determine the amount of charitable contributions;allowed the individual before consideration of any percentage limitations.;a. Charlie Chubbs contributed an;item of inventory from his sole proprietorship to a public charity for its use.;The fair market value of the asset was $800 and his basis was $600.b. Durwood Dodson contributed;some shares of common stock that he had held long-term to a private charity.;The basis of the stock was $8,000 and it had a fair market value of $7,000.c. Esther Ensign contributed;tangible personal property that she had held long-term to a public charity. The;asset had a fair market value of $10,000 and a basis of $6,000. The charity;intended to sell the asset and use the proceeds for charitable purposes.

 

Paper#42011 | Written in 18-Jul-2015

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