512 Pointsscott Provides Accounting Assist In Ans

512 Pointsscott Provides Accounting Assist In Ans

512 Pointsscott Provides Accounting Assist In Ans

Question 1 of 51

2 Points

Scott provides accounting services worth $40,000 to the ABC Partnership in exchange for a 20% interest in the capital and profits of the partnership. The tax result to Scott is

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Question 2 of 51

2 Points

Emma contributes property having a $24,000 FMV and a $15,000 adjusted basis and also renders legal services valued at $22,000 in exchange for a 30% interest in the capital and profits of the ABC partnership. The tax results to Emma will be

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Question 3 of 51

2 Points

Hunter contributes property having a $75,000 FMV and a $65,000 adjusted basis which is subject to a $36,000 mortgage in exchange for a one-fourth interest in the ABC Partnership. The partnership owes no other debts, but does assume this mortgage. Profits and losses are shared equally and each partner has a one-fourth interest in partnership capital. Hunter’s basis in the partnership is

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Question 4 of 51

2 Points

Duo Partnership reports the following items for the year:

Sales $750,000
Wage expense 300,000
Rent expense 50,000
Charitable contributions 10,000
Short-term capital gain 20,000
Sec. 179 expense 100,000

In addition to reporting separately stated items on the Form 1065, Duo will report ordinary income of

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Question 5 of 51

2 Points

All of the following are separately stated items that pass through from the partnership to the partners except

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Question 6 of 51

2 Points

David and Joycelyn form an equal partnership in the current year. No special allocation is provided for in the partnership agreement. During the year David contributes land having a $90,000 basis and a $100,000 FMV in exchange for the initial partnership interest. In addition, the partnership earns $50,000 of ordinary income while partnership liabilities increase from zero to $30,000 by the end of the tax year. The partnership earns $20,000 of tax-exempt interest during the year. David’s basis at the end of the current year is

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Question 7 of 51

2 Points

A taxpayer has various businesses which operate in different legal and tax forms. The qualified business income deduction will apply to the business income earned from all of the following businesses except

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Question 8 of 51

2 Points

Evie, a single taxpayer, is a 50% partner in a partnership. The partnership reports $100,000 of ordinary business income and no separately stated items. Evie also has $30,000 of taxable interest income and takes a $12,000 standard deduction. Evie will be allowed a qualified business income deduction of

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Question 9 of 51

2 Points

Richard has a 50% interest in a partnership, and he materially participates in the partnership’s business. Richard’s adjusted basis in the partnership was $60,000 at the beginning of the year, including his share of partnership liabilities. There were no distributions to Richard during the year. During the current year, the partnership borrowed $160,000 from a local bank to purchase equipment needed in the business. All of the partners are personally liable for all partnership debts. The partnership incurred a $320,000 loss this year. What amount can Richard claim as a loss from the partnership on his individual tax return this year?

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Question 10 of 51

2 Points

Mia is a 50% partner in a partnership with a beginning of the year adjusted basis in her partnership interest of $50,000. For the current year, no distributions are made to partners, and there is no change in partnership liabilities. The partnership incurred a $140,000 ordinary loss for the year. How does Mia treat her loss in excess of basis?

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Question 11 of 51

2 Points

Jamahl has a 65% interest in a partnership. Jamahl sells land to the partnership for $70,000. Prior to the sale, the land had a FMV of $70,000 and an adjusted basis of $90,000 to Jamahl. Due to the sale, Jamahl will recognize

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Question 12 of 51

2 Points

Jamahl has a 65% interest in a partnership. Jamahl sells land to the JK partnership for $70,000. Prior to the sale, the land had a FMV of $70,000 and an adjusted basis of $90,000 to Jamahl. Two years later, the partnership sells the land for $123,000. Due to the sale, the partnership will recognize

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Question 13 of 51

2 Points

Ben is a 30% partner in a partnership. The partnership guarantees Ben payments of $25,000 for the year. If the partnership has ordinary income of $15,000 before adjustment for the guaranteed payment, Ben must report

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Question 14 of 51

2 Points

All of the following statements are true regarding nonliquidating distributions of a partnership except

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Question 15 of 51

2 Points

Brittany receives a nonliquidating distribution of $48,000 cash from her partnership. Brittany’s basis in her partnership interest prior to the distribution is $25,000. What are the tax consequences of the distribution?

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Question 16 of 51

2 Points

Atiqa receives a nonliquidating distribution of land from her partnership. The partnership purchased the land five years ago for $20,000. At the time of the distribution, it is worth $28,000. Prior to the distribution, Atiqa’s basis in her partnership interest is $37,000. Due to the distribution, Atiqa and the partnership will recognize income of

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Question 17 of 51

2 Points

Atiqa receives a nonliquidating distribution of land from her partnership. The partnership purchased the land five years ago for $20,000. At the time of the distribution, it is worth $28,000. Prior to the distribution, Atiqa’s basis in her partnership interest is $37,000. Atiqa’s basis in the distributed land and her post-distribution basis in her partnership interest are

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Question 18 of 51

2 Points

Which of the following assets may cause a partner to recognize ordinary income rather than capital gain on the sale of a partnership interest?

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Question 19 of 51

2 Points

Lars has a basis in his partnership interest in XXL of $100,000. He sells the partnership interest in XXL for $160,000. XXL is a cash-basis partnership which has accounts receivable with a $30,000 fair market value and a zero adjusted basis. Lars’s share of these receivables is $10,000. What is the amount and character of the gain that Lars recognizes on the sale of his partnership interest?

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Question 20 of 51

2 Points

All of the following are requirements to qualify as an S corporation with the exception of

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Question 21 of 51

2 Points

A new corporation is formed on January 2, 2018. In order to have the S election effective as of the first day of the first tax year, the Form 2553 must be filed no later than

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Question 22 of 51

2 Points

Which of the following statements regarding voluntary revocation of the S election is incorrect?

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Question 23 of 51

2 Points

All of the following would reduce the basis of a shareholder’s stock in an S corporation, except

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Question 24 of 51

2 Points

Bryan Corporation, an S corporation since its organization, is owned entirely by Mr. Bryan. The corporation uses a calendar year as its taxable year. Mr. Bryan paid $120,000 for his Bryan stock when the corporation was formed on January 1 of this year. For this year, Bryan Corporation reported the following results:

Ordinary Income $65,000
Dividend Income 20,000
Short-term capital loss ( 2,000)

Distributions of $40,000 were made during the year. What is the basis of Mr. Bryan’s stock on December 31?

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Question 25 of 51

2 Points

Raina owns 100% of Tribo Inc., an S corporation. She started the business this year with a $100,000 capital contribution. In addition, the business borrowed $50,000 from the bank which she had to guarantee. Tribo incurred a first year operating loss of $170,000. Raina will deduct an ordinary loss this year of

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Question 26 of 51

2 Points

Tony is the 100% shareholder of a corporation established five years ago. It has always been an S corporation. After adjustment for this year’s corporate income, but before taking distributions into account, Tony has a $50,000 stock basis. The corporation pays Tony a $40,000 cash distribution. As a result of this distribution, Tony will have an ending stock basis and recognized income of

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Question 27 of 51

2 Points

An S corporation distributes land with a basis of $60,000 and a FMV of $90,000 to its shareholder. The tax results of the distribution will be

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Question 28 of 51

2 Points

An S corporation distributes land to its shareholders. The land has a $60,000 basis and a $90,000 FMV. The basis of the land to the shareholder is

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Question 29 of 51

2 Points

In the current year, Cesar, who is single, gives $26,000 to each of his 20 nieces and nephews for a total property transfer of $520,000. Cesar’s taxable gifts total

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Question 30 of 51

2 Points

Identify which of the following statements is true.

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Question 31 of 51

2 Points

Vincent makes the following property transfers in the current year:

• $5,000 tuition for a grandson paid directly to the school
• $1,000 medical expense for a child paid directly to a hospital
• $500 donation to the Democratic party
• $10,000 property settlement in conjunction with a divorce
• $3,000 room and board at college for a grandson paid directly to the school

Vincent’s gifts for the year before considering the annual gift tax exclusion total

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Question 32 of 51

2 Points

Which of the following transactions constitutes a completed gift made by Ellen, a widow, in the current year?

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Question 33 of 51

2 Points

Which of the following is a completed gift?

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Question 34 of 51

2 Points

Steve gave stock with an adjusted basis of $7,000 and an FMV of $10,000 to Alice. No gift tax was paid. Later, Alice sold the stock for $12,000. The gain Alice will recognize on the sale is

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Question 35 of 51

2 Points

Tracy gave stock with an adjusted basis of $18,000 and an FMV of $15,000 to her nephew Phil. No gift tax was paid. Phil sold the stock for $16,000. The gain or loss Phil will recognize on the sale is

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Question 36 of 51

2 Points

Miguel gives Roberta land with an adjusted basis of $50,000 and an FMV of $40,000. No gift tax is paid. Roberta sells the land for $36,000. Roberta recognizes

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Question 37 of 51

2 Points

The alternate valuation date is generally

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Question 38 of 51

2 Points

Identify which of the following statements is true.

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Question 39 of 51

2 Points

Charitable contributions made by a fiduciary

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Question 40 of 51

2 Points

An estate is allowed an income tax exemption of:

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Question 41 of 51

2 Points

A simple trust

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Question 42 of 51

2 Points

Which one of the following special loss limitations applies to an S corporation?

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Question 43 of 51

2 Points

Mashburn Corporation is an S corporation that uses a fiscal year ending June 30 as its tax year. When is Mashburn Corporation’s income tax return due?

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Question 44 of 51

2 Points

The estate of a decedent paid all of the following expenses during the year.Which one of these expenses are NOT allowable on the estate’s Form 1041, U.S. Fiduciary Income Tax return?

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Question 45 of 51

2 Points

Which of the following may be deducted in computing the taxable income of an estate on Form 1041?