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In 2014, James invested $30,000 in a cattle ? feeding partnership

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Question;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#52076 | Written in 18-Jul-2015

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