ACC 575 ACC575 Week 6 Quiz

ACC 575 ACC575 Week 6 Quiz

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ACC 575 Week 6 Quiz

1. 

Conner purchased 300 shares of Zinco stock for $30,000 in 1991. On May 23, 2009, Conner sold all the stock to his daughter Alice for $20,000, its then fair market value. Conner realized no other gain or loss during 2009. On July 26, 2009, Alice sold the 300 shares of Zinco for $25,000.

2. 

Data Corp., a calendar year corporation, purchased and placed into service office equipment during November 2009. 

No other equipment was placed into service during 2009.

3. 

Platt owns land that is operated as a parking lot. A shed was erected on the lot for the related transactions with customers.

4. 

How is the depreciation deduction of nonresidential real property (ignoring bonus depreciation), placed in service in 2009, determined for regular tax purposes using MACRS?

5. 

Nare, an accrual-basis taxpayer, owns a building which was rented to Mott under a ten-year lease expiring August 31, 2009.

6. 

Lee, an attorney, uses the cash receipts and disbursements method of reporting. 

In 2009, a client gave Lee 500 shares of a listed corporation's stock in full satisfaction of a $10,000 legal fee the client owed to Lee. This stock had a fair market value of $8,000 on the date it was given to Lee. The client's basis for this stock was $6,000. 

Lee sold the stock for cash in January 2009.

7. 

Majors, a candidate for a graduate degree, received the following scholarship awards from the university in 2009:

8. 

Under the uniform capitalization rules applicable to property acquired for resale, which of the following costs should be capitalized with respect to inventory if no exceptions are met?

9. 

With regard to depreciation computations made under the general MACRS method, the half-year convention provides that

10. 

In a "like-kind" exchange of an investment asset for a similar asset that will also be held as an investment, no taxable gain or loss will be recognized on the transaction if both assets consist of

11. 

Farr made a gift of stock to her child, Pat. At the date of gift, Farr's stock basis was $10,000 and the stock's fair market value was $15,000. No gift taxes were paid.

12. 

A taxpayer purchased five acres of land for $200,000 and placed in service other tangible business assets that cost $450,000. Disregarding business income limitations and assuming that the annual Section 179 (Election to Expense Certain Depreciable Business Assets) limit is $500,000, what maximum amount of cost recovery can the taxpayer claim this year?

13. 

Smith made a gift of property to Thompson. Smith's basis in the property was $1,200. The fair market value at the time of the gift was $1,400. Thompson sold the property for $2,500.

14. 

Which of the following conditions must be satisfied for a taxpayer to expense, in the year of purchase, under Internal Revenue Code Section 179, the cost of new or used tangible depreciable personal property?

15. 

In 2009, Fay sold 100 shares of Gym Co. stock to her son, Martin, for $11,000. Fay had paid $15,000 for the stock in 1995. Subsequently in 2009, Martin sold the stock to an unrelated third party for $16,000.

16. 

In December 2009, Davis purchased a new residence for $200,000. 

During that same month he sold his former residence for $80,000 and paid the realtor a $5,000 commission. The former residence, his first home, had cost $65,000 in 1990. 

Davis added a bathroom for $5,000 in 1991.

17.

In 2007, Ross was granted an incentive stock option (ISO) by her employer as part of an executive compensation package.

18.

Hall, a divorced person and custodian of her 12-year old child, filed her 2014 federal income tax return as head of a household. She submitted the following information to the CPA who prepared her 2014 return:

19. 

On August 1, 2008, Graham purchased and placed into service an office building costing $264,000 including $30,000 for the land. What was Graham's MACRS deduction for the office building in 2008?

20.

Which of the following is a capital asset?


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