Get Guided ACCT 553 Week 4 Midterm
Multiple Choice Questions – Chapter 1
- Question: To be guilty of tax evasion, you must:
- Question: The major source of federal tax revenue is:
- Question: Since 1980, the group of taxpayers whose tax burden has increased the most is:
- Question: The most popular form of doing business in the United States is:
- Question: The IRS levies penalties for which of the following:
Multiple Choice Questions – Chapter 3
- Question: Mr. and Mrs. Twig are both under 65 years of age and have no dependents. Their only income for the year was his salary of $15,500. During the year they made only a nominal amount of disbursements of the type that qualify as itemized deductions. What is their standard deduction on a 2011 joint return?
- Question: Jerry Jenkins is over 65 years of age and has no dependents. His only income was his salary of $10,500. During the year, he made only a nominal amount of disbursements of the type that qualify as itemized deductions of $3,290. What is his standard deduction for 2011?
- Question: What is Jerome Jackson’s standard deduction for 2011 if he has $20,000 in wages and files married filing separately? He also claims one of the two children.
- Question: What is the amount of standard deduction for Abigale Abrams 2011, a divorced parent, who fully supports her five-year-old daughter?
- Question: Determine the amount of taxable income of Michael Manx in 2011, who is single and has $300 of wages and $2,000 of interest income for the year………. his parents.
- Question: Marvin Miller, who is claimed as a dependent by his parents, received income of $3,100 from a trust fund and $500 from wages. Marvin had $1,050 in itemized deductions. What is Marvin’s taxable income?
Multiple Choice Questions – Chapter 13
- Question: A short tax year with the subsequent annualizing of taxable income is required for which of the following?
- Question: What is the amount of tax to be paid for a short period assuming the tax from placing the short period on an annual basis is $2,300; the tax computation for the short period without annualizing is $2,100, and the tax computation using the full 12 months and prorating is $2,200.
- Question: Which of the following is not a method of accounting?
- Question: The following statements about the cash basis method of accounting are false, except:
- Question: Jake Turner realized last December that he had almost reached the point where his medical expenses exceeded the 7.5 percent of AGI limitation. As a result, he insisted on paying his physician, Dr. Grope, $6,000 on account for future services for the Turner family. The results of this prepayment are:
- Question: Robert Graves sold his house to George Tombs for a total of $100,000……… George assumed a $50,000 mortgage on the property and signed a second mortgage for $30,000……..
Multiple Choice Questions – Chapter 4
- Question: All of the following are considered “constructive receipt” of income, except:
- Question: In which of the following situations will the divorced custodial parent be entitled to the dependency exemption for the child?
- Question: In July 1996, Dan Farley leased a building to Robert Shelter for a period of 15 years at a monthly rental of $1,000 with no option to renew. At that time the building had a remaining estimated useful life of 20 years. Prior to taking possession of the building, Shelter made improvements at a cost of $18,000. These improvements had an estimated useful life of 20 years at the commencement of the lease period. The lease expired on June 30, 2011, at which point the improvements had a fair market value of $2,000. The amount that Farley, the landlord, should include in his gross income for 2011 is: 6 mo * 1000 = 6000
- Question: Roger Burrows, age 19, is a full-time student at Marshall College and a candidate for a bachelor’s degree.
- Question: Kevin is a candidate for an undergraduate degree at a local university. In 2011, he was granted a fellowship that provided the following:
Multiple Choice Questions – Chapter 5
- Question: Mr. W. is 66 years old and single. His income for 2011 consisted of the following:
- Question: Mr. and Mrs. Birch are both over 65 years of age and are filing a joint return.
- Question: In 2011, Anne Apple received tangible personal property as a safety achievement award from her employer. The award was not a qualified plan award. The property cost the employer $500 and had a fair market value of $600. How much must Anne include in her 2011 gross income?
- Question: During 2011, Edward East had wages of $10,000 and received unemployment compensation of $6,200 from the state. Edward is single and 45 years old………….
- Question: On June 3, 2011, Leon Wren, an electrician, was injured in an accident during the course of his employment. As a result of injuries sustained, he received the following payments during 2011: Damages for personal injuries $8,000……… Wren’s 2011 gross income should be:
True-False Questions – Chapter 6
- Question: An ordinary expenditure is one that is commonly incurred by other businesses.
- Question: Hobby expenditures are deductible to the extent of hobby gross income.
- Question: If an employee accounts to the employer for business-related expenses and is reimbursed by the employer, the expenses must still be reported on the employee’s tax return.
- Question: Job-seeking expenses are not deductible if an individual finds a job in a new trade or business.
- Question: Rents and royalties expenses are deductible from adjusted gross income.
- Question: Tax deductions for tax planning and tax compliance expenses may only be claimed for expenses incurred in planning and compliance with respect to federal and state income taxes.
- Question: The Cohan case set a requirement for tax purposes that adequate substantiation is required for every tax deduction claimed on a tax return.
- Question: Advertising which is intended to influence the public reaction to proposed legislation normally is not a deductible business expense for tax purposes.
- Question: The amount of a bad debt deduction is always limited to the adjusted basis of the debt in the hands of the taxpayer.
- The full worthlessness of debt must be proven in order to claim a business bad debt deduction.
Multiple Choice Questions – Chapter 7
- Question: Ann Jones uses a dry cleaning machine in her business, and it was completely destroyed by fire. At the time of the fire, the adjusted basis was $20,000 and its fair market value was $18,000. How much is Ann’s loss?
- Question: Ann Jones uses a dry cleaning machine in her business, and it was partially destroyed by fire. At the time of the fire, the adjusted basis was $20,000 and its fair market value was $18,000. The adjusted basis after the fire is $10,000 and the fair market value after the casualty is $10,000. How much is the casualty loss?
- Question: ABC, Inc. of Jasper, Georgia suffered a casualty loss of $150,000 in March 2011………. As a result of these rains, the President declared North Georgia (including Jasper) a disaster area on March 23, 2011. In what year can ABC, Inc. elect to deduct the casualty loss?
- Question: Which of the following is not a passive activity?
- Question: All of the outstanding stock of a closely held C corporation is owned equally by Evelyn Humo and Steve Bufusno. In 2011, the corporation generates a taxable income of $20,000 from its active business activities. In addition, it earns $20,000 of interest from investments and incurs a $40,000 loss from passive activity.
- Question: All of the outstanding stock of a closely held C corporation is owned equally by Evelyn Humo and Steve Bufusno. In 2011, the corporation generates a taxable income of $20,000 from its active business activities. In addition, it earns $20,000 of interest from investments and incurs a $40,000 loss from passive activity. How much of a passive loss carryover does the corporation have?
True-False Questions – Chapter 8
- Question: Itemized deductions only reduce taxable income if the taxpayer’s itemized deductions exceed the standard deduction amount.
- Question: Individual taxpayers are allowed to deduct unreimbursed medical and dental expenses paid during the year for themselves, their spouses, and dependents.
- Question: Medical expenses recovered after being claimed as a deduction in the previous year must be included in income in the year of recovery to the extent that the deduction decreased taxable income in the year they were deducted.
- Question: An individual has an insurance policy that will pay $500 a week no matter what the hospital expenses are, for 100 weeks in the event of hospitalization. The premium on this policy qualifies as a deductible medical expense subject to the applicable limitations.
- Question: Vitamin pills taken daily for general health are a qualified medical expense.
- Question: To alleviate an obesity problem, a doctor puts a patient on a special diet. The total cost of the patient’s food for the special diet is a deductible medical expense.
Multiple Choice Questions – Chapter 14
- Question: Which of the following items are eligible for immediate expensing and 180-month amortization?
- Question: Sandra Sherman incorporates her apartment building. It has a basis of $50,000, a value of $150,000, is subject to a mortgage of $70,000 and has a depreciation recapture potential of $12,000. If Sandra receives stock worth $80,000, she will recognize:
- Question: Evan Erman transferred inventory to a corporation in a Code Sec. 351 transactions. His basis in the inventory was $10,000 and its value was $8,000. If he received $2,000 in cash and 100 shares of stock, the resulting bases are:
- Question: Algernon Amsley transferred the following to his controlled corporation in exchange for stock:
- Question: One year Potter, Inc. had gross income from sales of $210,000, business expenses of $230,000, and dividend income from U.S. corporations of $150,000.
- Prior to a charitable gift to the Plato University of land with a basis of $6,000 and a value of $13,000, All-Set, Inc. had a taxable income of $50,000. If the dividends-received deduction was $80,000, the charitable contribution deduction is:
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