Question: Daniel, age 38, is single and has

> Christine is a full-time teacher of the fourth grade at Vireo Academy. During the current year, she spends $1,400 for classroom supplies. On the submission of adequate substantiation, Vireo reimburses her for $ 500 of these expenses the maximum reimburse

> In 2018, Ava, an employee, has AGI of $58000 and the following itemized deductions: What is Ava's total itemized deduction related to these items? Home office expenses $1,200 Union dues and work uniforms 350 Unreimbursed employee expenses Gambling

> Which of the following is a deduction for AGI? a. Charitable contributions b. Alimony paid c. Tax preparation fees d. Mortgage interest paid on your primary residence

> Melanie is employed full-time as an accountant for a national hardware chain. She recently started a private consulting practice, which provides tax advice, and financial planning to the general public. For this purpose, she maintains an office in her ho

> Stork Associates paid $60,000 for a 20-seat skybox at Veterans Stadium for eight professional football games. Regu1ar seats to these games range from $80 to $250 each. At one game, an employee of Stork entertained 18 clients. Stork furnished food and bev

> Monica travels from her office in Boston to Lisbon, Portugal, on business. Her Decision Making absence of 13 days was spent as follows: a. For tax purposes, how many days has Monica spent on business? b. What difference does it make? c. Could Monica h

> Kim works for a clothing manufacturer as a dress designer. During 2018, she travels to New York City to attend five days of fashion shows and then spends three days sightseeing. Her expenses are as follows: [Assume that lodging/meals are the same amoun

> Martha was considering starting a new business. During her preliminary investigation, related to the new venture, she incurred the following expenditures. Martha begins the business on July 1 of the current year. If Martha elects 195 treatment, determi

> Oleander Corporation, a calendar year entity, begins business on March 1, 2018. The corporation incurs startup expenditures of $64,000. If Oleander elects 195 treatment, determine the total amount of startup expenditures that it may deduct for 2018.

> Dennis Harding is considering acquiring a new automobile that he will use 100% for business. The purchase price of the automobile would be $48,500. If Dennis leased the car for five years, the lease payment would be $375 per month. Dennis will acquire th

> Sally purchased a new computer (5-year property) on June 1, 2018, for $4,000. Sally could use the computer 100% of the time in her business, or she could allow her family to use the computer as well. Sally estimates that if her family uses the computer,

> On March 15, 2018, Helen purchased and placed in service a new Escalade. The purchase price was $62,000, and the vehicle had a rating of 6,500 GVW. The vehicle was used 100% for business. a. Assuming that Helen does not use additional first-year deprecia

> On April 3, 2018, Terry purchased and placed in service a building that cost $2 million. An appraisal determined that 25% of the total cost was attributed to the value of the land. The bottom floor of the building is leased to a retail business for $32,0

> On Mark 25, 2018, Prascale Company purchases the rights to a mineral interest for 8 million. At that time, the remaining recoverable units in the mineral interest are estimated to be 500,000 tons. If 80,000 tons are mined and 75,000 tons are sold this ye

> On August 2, 2018, Wendy purchased a new office building for $3.8 million On October 1, 2018, she began to rent out office space in the building. On July 15, 2022, Wendy sold the office building. a. Determine Wendy's cost recovery deduction for 2018. b.

> Weston acquires a new office machine (7-year class asset) on August 2, 2017, for $75,000. This is the only asset Weston acquired during the year. He does not elect immediate expensing under 179. He claims the maximum additional first-year depreciation de

> Orange Corporation acquired new office furniture on August 15, 2018, for $130,000. Orange does not elect immediate expensing under 179. Orange claims any available additional first-year depreciation a. Determine Orange's cost recovery for 2018. b. How wo

> In 2015, Jose purchased a house for $325,000 ($300,000 relates to the house; $25,000 relates to the land). He used the house as his personal residence. In March 2018, when the fair market value of the house was $400,000, he converted the house to rental

> Jed, age 55, is married with no children. During 2018, Jed had the following income and expense items: a. Three years ago, Jed loaned a friend $10,000 to help him purchase a new car In June of the current year, Jed learned that his friend had been declar

> Assume that in addition to the information in Problems 49 and 50, Nell had the following items in 2018: The casualty loss is net of the $100-per-event floor. Determine Nell's taxable income and NOL for 2018. Data from Problem 49: Nell, single and age

> Assume that in addition to the information in Problem 49, Nell had the following items in 2018: The casualty gains and losses are net of the $100-per-event floor. Determine Nell's AGI for 2018. Data from Problem 49: Nell, single and age 38, had the f

> Nell, single and age 38, had the following income and expense items in 2018: Determine Nell's AGI for 2018. Nonbusiness bad debt $ 6,000 Business bad debt 2,000 Nonbusiness long-term capital gain Nonbusiness short-term capital loss Salary 4,000 3,0

> Soong, single and age 32, had the following items for the tax year 2018: • Salary of $ 30,000. • Interest income from U.S. government bonds of $2,000. • Dividends from a foreign corporation of $ 500 • Sale of small business 1244 stock on October 20, 2018

> Javiera and Magda are married and file a joint return. They had the following income and deductions for 2019: a. What is Javiera and Magda's taxable income for 2019? b What is Javiera and Magda's NOL for 2019? Salary Interest from savings account $

> On September 30, 2018, Priscilla purchased a business. Of the purchase price, $60,000 is allocated to a patent and $375,000 is allocated to goodwill. Calculate Priscilla's 2018 § 197 amortization deduction.

> During 2018, Rick and his wife, Sara had the following items of income and expense to report: a. Assuming that Rick and Sara file a joint return, what is their taxable income for 2018? b. What is the amount of Rick and Sara's NOL for 2018? c. To what y

> Xinran, who is married and files a joint return, ow ns a grocery store. In 2018 his gross sales were $276,000, and operating expenses were $320,000. Other items on his 2018 return were as follows: In 2019, Xinran provides the following information: a

> Sam, age 45, is single. For 2018, he has the following items: a. Determine Sam's taxab1e income for 2018. b. Determine Sam's NOL for 2018. Business income $70,000 Business expenses 75,000 Alimony paid (divorce occurred in 2014) 11,000 Interest inco

> Timothy Gates and Prada Singh decide to form a new company, TG PS LLC (a mu1timember LLC that will report its operations as a partnership). Timothy is married, and Prada is sing1e. Each contributes $400,000 of capital to begin the business, and both mate

> During 2018, Leisel, a single taxpayer, operates a sole proprietorship in which she matierally participates. Her proprietorship generates gross income of $142,000 and deductions of $420,000, resulting is a loss of $278,000. The large deductions are due t

> On July 24 of the current year Sam Smith was inv01ved in an accident with Communications his business use automobile. Sam had purchased the car for $30,000. The automobile had a fair market va1ue of $20,000 before the accident and $8,000 immediate1y afte

> Heather owns a two-story building. The building is used 40% for business use and 60% for persona1 use. During 2018, a fire caused major damage to the building and its contents. Heather purchased the building for $800,000 and has taken depreciation of $10

> Jocelyn and Esteban file a joint return. For the current year, they had the following items: Determine their AGI for the current year. Salaries $120,000 Loss on sale of 5 1244 stock acquired two years ago Gain on sale of § 1244 stock acquired six m

> Sally is in the business of purchasing accounts receivable. Last year Sally purchased an account receivab1e with a face value of $80,000 for $60,000. During the current year, Sally settled the account, receiving $65,000. Determine the maximum amount of t

> Several years ago John Johnson, who is in the 1ending business, loaned Sara Communications $30,000 to purchase an automobile to be used for personal purposes. In August of the current year, Sara filed for bankruptcy, and John was notified that he cou1d n

> Diana acquire， for $65,000, and places in service a 5-year class asset on December 19, 2018. It is the only asset that Diana acquires during 2018. Diana does not elect immediate expensing under 179. She elects additional first year deprecation. Calculate

> For each of the following independent transactions, calculate the recognize gain or loss to the seller and the adjusted basis to the buyer. a. Kiera sells Parchment, 1nc. stock (adjusted basis $17,000) to Phillip, her brother, for its fair market value o

> Chee, single, age 40, had the following income and expenses during 2018: Calculate Chee's taxable income for the year. If Chee has any options, choose the method that maximizes his deductions. Income Salary $43,000 Rental of vacation home (rented

> How would your answer to Problem 48 differ if Anna had rented house for 87 days and had used it personally for 13 days? Data from Problem 48: During the year (not a leap year) Anna rented her vacation home for 30 days, used it personally for 20 days, a

> During the year (not a leap year) Anna rented her vacation home for 30 days, used it personally for 20 days, and 1eft it vacant for 315 days. She had the following income and expenses: a. Compute Anna's net rent income or loss and the amounts she can i

> Piper owns a vacation cabin in the Tennessee mountains. Without considering the cabin, she has gross income of $65,000. During the year, she rents the cabin for two weeks for $2,500 and uses it herself for four weeks. The total expenses for the year are

> Jamari Peters (Social Security number 123-45-6789) conducts a business with the following results in 2018: Jamari estimates that due to a depressed real estate market, the value of land owned by the business declined by $5,200. a. Calculate the effect

> Terry traveled to a neighboring state to investigate the purchase of two hardware stores. His expenses included travel, legal, accounting, and miscellaneous expenses. The total was $52,000. He incurred the expenses in June and July 2018. Under the follow

> Amber, a publicly held corporation, currently pays its president an annual salary of $900,000. As a means of increasing company profitability, the board of directors increased the president's compensation effective January 1, 2017, with a performance-bas

> Fynn incurred and paid the following expenses during 2018: • $50 for a ticket for running a red light while he was commuting to work. • $100 for a ticket for parking in a handicapped parking space. • $200 to an attorney to represent him in traffic court

> Suzzane, a single taxpayer, operates a printing business as a sole proprietor. The business has two employees who are paid a total of $90,000 during 2018. Assume that the business has no significant assets. During 2018, the business generates $150,000 of

> Lopez acquired a building on June 1, 2013, for $1 million. Calculate Lopez's cost recovery deduction for 2018 if the building is: a. Classified as residential rental real estate. b. Classified as nonresidential real estate.

> A list of the items that Faith sold and the losses she incurred during the current tax year is as follows: She also had a theft loss of $1,500 on her uninsured business use car. Calculate Faith's deductible losses. Yellow, Inc. stock $ 1,600 Faith'

> Janice, age 22, is a student who earns $10,000 working part-time at the collage ice cream shop in 2018. She has no other income. Her medica1 expenses for the year total $3,000. During the year, she suffers a casua1ty 10ss of $3,500 when her apartment is

> Starting in 2007, Chuck and Luane have been purchasing series EE bonds in their names to use for the higher education for their daughter Susie, who currently is age 18. During the year, they cash in $12,000 of the bonds to use for freshman year tuition,

> Lynn Swart’z husband died three years ago. Her parents have income of $200,000 a year and what to ensure that funds will be available for the education of Lynn's 8-year-old son, Eric. Lynn is currently earning $45,000 a year. Lynn's parents have suggeste

> Tonya, who lives in California inherited a $100,000 state of California bond in 2018. Her marginal Federal tax rate is 35%, and her marginal state tax rate is 5%. The California bond pays 3.3% interest, which is not subject to California income tax. She

> In January 2018, Ezra purchased 2,000 shares of Gold Utility Mutual Fund for $20,000. In June, Ezra received an additional 100 shares as a dividend, in lieu of receiving $1,000 in cash dividends. In December, the company declared a two-for-one stock spli

> Tim is the vice president of western operations for Maroon Oil Company and is stationed in San Francisco. He is required to live in an emp1oyer-owned home, which is three b10cks from his company office. The company-provided home is equipped with high-spe

> Sally was an all-state soccer player during her junior and senior years in high school. She accepted an athletic scholarship from State University. The scholarship provided the following: a. Determine the effect of the scholarship on Sally's gross inco

> Ridge is a generous individual. During the year he made interest free loans to various family members when the Federal rate was 3%. What are the tax consequences of the following loans by Ridge: a. On June 30, 2017, Ridge loaned $12,000 to his cousin, Ji

> Euclid acquires a 7-year class asset on May 9, 2018 for $80,000. Euclid does not elect immediate expensing under 179. She does not claim any available additional first -year depreciation. Calculate Euclid's cost recovery deduction for 2018 and 2019.

> Nell and Kirby are in a process of negotiating their divorce agreement to be finalized in 2018. What should be the tax consequences to Nell and Kirby if the following, considered individually, became part of the agreement? a. In consideration for her one

> Linda and Don are married and filed a joint return. In 2018, they received $12,000 in Social Security benefits and $35,000 in taxable pension benefits and interest. a. Compute the couple's adjusted gross income on a joint return. b. Don would like to kno

> Liz and Doug were divorced on December 31, 2018, after 10 year of marriage. Their current year’s income received before the divorce was on follows: Allocate the income to Liz and Doug assuming that they live in: a. California. b. Texa

> In 2018, Alva received dividends on her stocks as follows: a. Alva purchased the Grape stock three years ago, and she purchased the Amur stock two years ago. She purchased the Blaze stock 18 days before it went ex dividend and sold it 20 days later at

> Freda is a cash basis taxpayer. In 2018, she negotiated her salary for 2019. Her employer offered to pay her $21,000 per month in 2019 for a total of $252,000. Freda countered that she would accept $10,000 each month for the 12 months in 2019 and the rem

> Trip Garage, Inc. (459 Ellis Avenue, Harrisburg, PA 17111), is an accrual basis taxpayer that repairs automobiles. In late December 2018, the company repaired Samuel Mos1ey's car and charged him $1,000. Samuel did not think the problem had been fixed and

> Vito is the sole shareholder of Vito 1nc. He is also employed by the corporation. On June 30, 2018, Vito borrowed $8,000 from Vito, Inc., and on July 1, 2019, he borrowed an additional $10,000. Both loans were due on demand. No interest was charged on th

> Each year, Tom and Cindy Bates norma11y have itemized deductions of $20,000, including a $4,000 p1edge payment to their church. Upon the advice of a friend, they do the following: in early January 2018, they pay their pledge for 2017; during 2018, they p

> During 2018, Chester (a married taxpayer filing a joint return) had the following transactions inv0lving capital assets: a. If Chester is in the 32% bracket, how much income tax results? b. If Chester is in the 12% bracket (and has taxab1e income of $

> During 2018, Inez (a single taxpayer) had the following transactions involving capital assets. a. If Inez is in the 32% bracket, how much income tax results? b. If Inez is in the 12% bracket (and has taxable income of $35,000), how much income tax res

> During the year, Tucker had the following personal causality gains and losses (after deducting the $100 floor): What are the tax consequences of these items to Tucker? Asset Holding Period Gain or (Loss) Asset 1 18 months ($1,200) Asset 2 2 months

> Al is a medical doctor who conducts his practice as a sole proprietor. During 2018, he received cash of $280,000 for medical services. Of the amount collected, $40,000 was for services provided in 2017. At the end of 2018, Al had accounts receivable of $

> In each of the following independent situations, determine Winston's filing status for 2018. Winston is not married. a. Winston lives alone, but he maintains a household in which his parents live. The mother qualifies as Winston's dependent, but the fath

> Nadia died in 2017 and is survived by her husband, Jerold (age 44); her married son, Travis (age 22); and her daughter-in-law, Macy (age 18). Jerold is the executor of his wife's estate. He maintains the household where he, Travis, and Macy live and furn

> Christopher died in 2016 and is survived by his wife， Chloe and their 18 year-old son, Dylan. Chloe is the executor of Christopher's estate and maintains the household in which she and Dylan live. All of their support is furnished by C

> Using the legend provided class each of the following statements: a. Sue writes a $707 check for a charitable contribution on December 28, 2018, but does not mail the check to the charitable organization until January 10, 2019. She takes a deduction in

> Troy, a cash basis taxpayer, is employed by Eagle Corporation, also a cash basis taxpayer. Troy is a full-time employee of the corporation and receives a salary of $60,000 per year. He also receives a bonus equal to 10% of all collections from clients he

> Using the legend provided, classify each of the following tax sources: a. Sixteenth Amendment to the U.S. Constitution. b. Tax treaty between the United States and India. c. Revenue Procedure. d. An IRS publication. e. U.S. District Court decision. f.

> Rank the items below from most reliable to least reliable: a. Letter Ruling. b. Legislative Regulation. c. Code Section. d. Revenue Ruling. e. Proposed Regulation. f. Interpretive Regulation. g. Recent Temporary Regulation.

> Which of the following items can be found in the Federal Register. a. Letter Ruling. b. Action on Decision. c. Revenue Procedure. d. Temporary Regulation. e. Technical Advice Memorandum.

> Walter and Nancy provide 60% of the support their daughter (age 18) and son-in-law (age 22). The son-in-law (John) is a full-time student at a local university, while the daughter (Irene) holds various part -time jobs from which she earns $11,000. Walter

> Belinda was involved in a boating accident in 2018. Her speedboat, which was used only for personal use and had a fair market value of $28,000 and an adjusted basis of $14,000, was completely destroyed. She received $10,000 from her insurance company. He

> Marlene, a cash basis taxpayer, invests in Series EE U.S. government savings bonds and bank certificates of deposit (CDs). Determine the tax consequences of the following on her 2018 gross income: a. On September 30, 2018, she cashed in Series EE bonds f

> Determine the effects of the following on a cash basis taxpayer’s gross income for 2018 and 2019. a. On the morning of December 31, 2018, the taxpayer received a $1,500 check from a customer. The taxpayer did not cash the check until January 3, 2019. b.

> During 2018, Jenny, age 14, lives in a household with her father, uncle, and grandmother. The household is maintained by the uncle. The parties, all of whom file separate returns, have AGI as follows: father ($30,000), uncle ($50,000), and grandmother ($

> Determine number of dependents in each of the following independent situations, and identify whether the dependent is a qualifying child or a qualifying relative. a. Andy maintains a household that includes a cousin (age 12), a niece (age 18), and a son

> Compute the number of dependents in each of the following independent situation: a. Reginald, a U.S. citizen and resident, contributes 100% of the support of his parents who are citizens of Canada and live there. b. Pablo, a U.S. citizen and resident, co

> For tax year 2018, determine the number of dependents in each of the following independent situations: a. Leo and Amanda (ages 48 and 46, respectively) are husband and wife and furnish more than 50% of the support of their two children, Elton (age 18) an

> Donald was killed in an accident while he was on the job in 2018. Darlene, Donald's wife, received several payments as a result of Donald's death. What is Darlene's gross income from the items listed below? a. Donald's employer paid Darlene an amount equ

> What is the taxpayer's gross income in each of the following situations? a. Darrin received a salary of $50,000 in 2018 from his employer, Green Construction. b. In July 2018, Green gave Darrin an all-expense-paid trip to Las Vegas (value of $3,000) for

> Jane a tax practitioner has reviewed the law on how state X’s income tax applies to a client web-based consulting business, but is unable to reach a conclusion for which she has a high level of confidence. Assuming that Jane is a knowledgeable and experi

> In choosing between taking the standard deduction and itemizing deductions from AGI, what effect, if any, does each of the following have? a. The age of the taxpayer(s). b. The health (i.e., physical condition) of the taxpayer. c. Whether taxpayers rent

> Tobias has a brokerage account and buys on the margin which resulted in an interest expense of $20,000 during the year. Income generated through the brokerage account was as follows: How much investment interest can Tobias deduct? Municipal interes

> C1assify each of the following expenditures paid in 2018 as a deduction for AGI, a deduction from AGI, or not deductib1e: a. Barak contributes to his H.R. 10 p1an (i.e., a retirement plan for a self-emp1oyed individual). b. Keith pays child support to hi

> Leonard's home was damaged by a fire. He also had to be absent from work for several days to make his home habitable. Leonard's employer paid Leonard his regular salary, $2,500, while he was absent from work. In Leonard's pay envelope was the following n

> Compare and contrast the economist's concept used to recognize income with the concept employed in measuring taxable income.

> Explain how an account receivable can give rise to a bad debt deduction.

> If depreciab1e equipment used in a business is sold at a recognized gain on July 10, 2018, and it was purchased on August 21, 2017, does § 1245 depreciation recapture apply to the asset? Explain.

> Steven established a sole proprietorship in 2012. He sold 1231 asset at a loss in 2016 and 2017. He had only sold § 1231 assets at a gain before 2016. In 2018, he cou1d sell a § 1231 asset at a gain and would like to have the gain taxed as a long-term ca

> An individual taxpayer had a net 1231 loss in 2018. Could any of this loss be treated as a long-term capital loss? Why or why not?

> Bernice, a sole proprietor, sold two business asset during the year. As a result, she has an ordinary loss and a § 1231 gain. The loss asset was office furniture that was held for eight months, and the gain asset is land that was held for five years. Why

> If there is a net loss from the sale of depreciable business property held long term, what is the character of the loss? How is it deducted (for or from AGI)?

> Complete the following statements regarding speω1 recapture provisions. a. Corporations selling depreciable real property are required to recapture as ordinary income the of two amounts: (1) % of the recognized gain or (2) % of the depreciation taken. b.