TAX FINAL

Allowing for the cutback adjustment (50% reduction for meals and entertainment), which of the following trips, if any, will qualify for the travel expense deduction? a. Dr. Jones, a general dentist, attends a two-day seminar on developing a dental practice. b. Dr. Brown, a surgeon, attends a two-day seminar on financial planning. c. Paul, a romance language high school teacher, spends summer break in France, Portugal, and Spain improving his language skills. d. Myrna went on a twoweek vacation in Boston. While there, she visited her employer's home office to have lunch with former co-workers. e. All of these.

A

Pat gave 5,000 shares of stock in Coyote Corporation (a publicly traded corporation) to her church (a qualified charitable organization) in the current year. The stock was worth $180,000 and she had acquired it as an investment four years ago at a cost of $120,000. She reported AGI of $300,000 for the year. In completing her current income tax return, how much is her current-year charitable contribution deduction? a. $90,000 b. $180,000 c. None of the above d. $150,000 e. $120,000

A.

Ramon incurred $83,100 of interest expense related to his investments this year. His investment income included $34,500 of interest and a $37,500 net capital gain on the sale of securities. Ramon has asked you to compute the amount of his deduction for investment interest, taking into consideration any options he might have. What is the maximum amount of Ramon's investment interest expense deduction in the current year? Select one: a. $72,000. b. $34,500. c. $83,100. d. $19,500. e. None of the above.

A.

Which of the following is not allowed as an itemized deduction?Select one: a. A subscription to the Wall Street Journal to help with personal investment decisions. b. None of the above (all are allowed as itemized deductions). c. Gambling losses to the extent of gambling winnings. d. Cash donation to a church. e. Interest expense on a $800,000 loan incurred in 2016 to buy a principal residence.

A.

Which, if any, of the following factors is not a characteristic of independent contractor status? a. Work-related expenses are reported on Form 2106. b. Receipt of a Form 1099 reporting payments received. c. Workplace fringe benefits are not available. d. Services are performed for more than one party. e. None of these.

A.

Kevin and Sue have two children, ages 8 and 14. They spend $6,200 per year on eligible employment related expenses for the care of their children after school. Kevin earned a salary of $20,000 and Sue earned a salary of $18,000. What is the amount of the credit for child and dependent care expenses? a. $690 b. $713 c. $1,380 d. $1,426 e. None of these

A. (3000 * 23%)

Byron owned stock in Blossom Corporation that he donated to a museum (a qualified charitable organization) on June 8 this year. What is the amount of Byron's deduction assuming that he had purchased the stock for $10,500 last year on August 7, and the stock had a fair market value of $13,800 when he made the donation? a. $3,300 b. $10,500 c. $12,150 d. $13,800 e. None of these

B

Which, if any, of the following is an advantage of using the simplified method for determining the office in the home deduction? a. The exclusive use requirement does not have to be met. b. Allows the expense to be classified as a deduction for AGI. c. No depreciation on the personal residence has to be computed. d. Can also be used for a residence that is rented (not owned) by the taxpayer. e. None of these.

C.

Aaron is a self-employed practical nurse who works out of his home. He provides nursing care for disabled persons living in their residences. During the day he drives his car as follows. Miles Aaron's home to patient Louise 12 Patient Louise to patient Carl 4 Patient Carl to patient Betty 6 Patient Betty to Aaron's home 10 ​Aaron's deductible mileage for each workday is: a. 22 miles. b. 10 miles. c. 32 miles. d. 20 miles. e. 12 miles.

C. 32 Miles

A worker may prefer to be classified as an employee (rather than an independent contractor) for which of the following reasons: a. To claim unreimbursed work-related expenses as a deduction for AGI. b. To avoid the self-employment tax. c. To avoid the cutback adjustment on unreimbursed business entertainment expenses. d. To avoid the 2%-of-AGI floor on unreimbursed work-related expenses. e. None of these.

B.

Brad, who would otherwise qualify as Faye's dependent, had gross income of $9,000 during the year. Faye, who had AGI of $120,000, paid the following medical expenses this year: Cataract operation for Brad $5,400 Brad's prescribed contact lenses 1,800 Faye's doctor and dentist bills 12,600 Prescribed drugs for Faye 2,550 Total $22,350 Faye has a medical expense deduction of: a. $3,150 b. $10,350 c. $13,350 d. $4,950 e. None of the above

B.

Emily, who lives in Indiana, volunteered to travel to Louisiana in March to work on a home-building project for Habitat for Humanity (a qualified charitable organization). She was in Louisiana for three weeks. She normally makes $500 per week as a carpenter's assistant and plans to deduct $1,500 as a charitable contribution. In addition, she incurred the following costs in connection with the trip: $600 for transportation, $1,200 for lodging, and $400 for meals. What is Emily's deduction associated with this charitable activity? a. $3,700 b. $2,200 c. $600 d. $1,800 e. $1,200

B.

Hannah makes the following charitable donations in the current year: (Basis; Fair Market Value) Inventory held for resale in Hannah's business (a sole proprietorship) ($8,000; $7,200) Stock in HBM, Inc., held as an investment (acquired four years ago) ($16,000; $40,000) Baseball card collection held as an investment (acquired six years ago) ($4,000; $20,000) The HBM stock and the inventory were given to Hannah's church, and the baseball card collection was given to the United Way. Both donees promptly sold the property for the stated fair market value. Disregarding percentage limitations, Hannah's current charitable contribution deduction is: a. $28,000. b. $51,200. c. $67,200. d. None of the above. e. $52,000.

B.

Rachel is single and has a college degree in finance. She is employed as a loan officer at a bank; her yearly AGI approximates $50,000. During the year, she enrolled in a weekend MBA program and incurred the following nonreimbursed expenses: $4,100 (tuition), $300 (books), $200 (other school supplies), and $200 (transportation to and from campus). As to the MBA program, Rachel has a: a. Deduction for AGI of $4,100 and deduction from AGI of $700. b. Deduction for AGI of $4,000 and deduction from AGI of $0. c. None of these. d. Deduction for AGI of $4,000 and deduction from AGI of $800. e. Deduction for and deduction from AGI of $0.

B.

Sandra is single and does a lot of business entertaining at home. Because Arthur, Sandra's 80 year old dependent grandfather who lived with Sandra, needs medical and nursing care, he moved to Twilight Nursing Home. During the year, Sandra made the following payments on behalf of Arthur: Room at Twilight $4,500 Meals for Arthur at Twilight 850 Doctor and nurse fees 700 Cable TV service for Arthur's room 107 Total $6,157 Twilight has medical staff in residence. Disregarding the AGI floor, how much, if any, of these expenses qualify for a medical deduction by Sandra? a. $6,157 b. $6,050 c. $5,200 d. $1,550 e. None of these

B.

The § 222 deduction for tuition and related expenses is available: a. To deduct that portion of the tuition in excess of that allowed under the lifetime learning credit. b. None of these. c. Only if job related. d. Only if the taxpayer itemizes deductions from AGI. e. To cover the tuition of a son who does not qualify as taxpayer's dependent.

B.

Zeke made the following donations to qualified charitable organizations during the year: (Basis, FMV) Used clothing (all acquired more than a year ago) of $ 1,350 $ 375 Stock in ABC, Inc., held as an investment for fifteen months 12,000 10,875 Stock in MNO, Inc., held as an investment for eleven months 15,000 18,000 Real estate held as an investment for two years 15,000 30,000 The used clothing was donated to the Salvation Army; the other items of property were donated to Eastern State University. Both are qualified charitable organizations. Disregarding percentage limitations, Zeke's charitable contribution deduction for the year is: a. $43,350. b. $56,250. c. $59,250. d. $60,375. e. None of these.

B.

Your friend Scotty informs you that he received a "tax-free" reimbursement in 2018 of some medical expenses he paid in 2017. Which of the following statements best explains why Scotty is not required to report the reimbursement in gross income?Select one: a. Scotty itemized deductions in 2017. b. Scotty itemized deductions in 2018 but not in 2017. c. Scotty did not itemize deductions in 2017. d. Scotty did not itemize deductions in 2018. e. Scotty itemized deductions in 2018.

C.

Tom, age 48, is advised by his family physician that he needs back surgery to correct a problem from his last back surgery. Since Tom is in a wheel chair, he needs his wife, Jean, to accompany him on his trip to Rochester, Minnesota, for in-patient treatment at the Mayo Clinic, which specializes in this type of surgery. Tom incurred the following costs in 2014: Round-trip airfare ($350 each) $ 700 Jean's hotel in Rochester for four nights ($95 per night) 380 Jean's meals while in Rochester 105 Tom's medical treatment 3,500 Tom's prescription medicine 600 Compute Tom's medical expenses for the trip (subject to the 10% floor). a. $4,000 b. $5,000 c. $5,180 d. $5,285 e. None of these

B. ($50 per night lodging for the guest)

During 2014, Hugh, a self-employed individual, paid the following amounts: Real estate tax on Iowa residence $3,800 State income tax 1,700 Real estate taxes on land in Puerto Rico (held as an investment) 1,100 Gift tax paid on gift to daughter 1,200 State sales taxes 1,750 State occupational license fee 300 Property tax on value of his automobile (used 100% for business) 475 What is the maximum amount Hugh can claim as taxes in itemizing deductions from AGI? a. $6,600 b. $6,650 c. $7,850 d. $8,625 e. None of these

B. (the state occupational fee and the business auto tax are FOR agi, and the gift tax is not deductible)

Richard, age 50, is employed as an actuary. For calendar year 2018, he had AGI of $130,000 and paid the following medical expenses: Medical insurance premiums $5,300 Doctor and dentist bills for Derrick and Jane (Richard's parents) 7,900 Doctor and dentist bills for Richard 5,100 Prescribed medicines for Richard 830 Nonprescribed insulin for Richard960 Derrick and Jane would qualify as Richard's dependents except that they file a joint return. Richard's medical insurance policy does not cover them. Richard filed a claim for $4,800 of his own expenses with his insurance company in November 2018 and received the reimbursement in January 2019. What is Richard's maximum allowable medical expense deduction for 2018? a. $0 b. $7,090 c. None of the above d. $20,090 e. $10,340

B. if 2019 and using 10% floor E. if 2018 and using 7.5% floor

Ralph made the following business gifts during the year. To Robert (a key client) at Christmas $50 To Angel (Robert's 8year old daughter) on her birthday 20 To Art (Ralph's secretary) on his birthday ($3 was for gift wrapping) 30 To Paige (Ralph's boss) at Christmas 40 Presuming proper substantiation, Ralph's deduction is: a. $0. b. $53. c. $73. d. $78. e. $98.

B. you cannot deduct the daughter's or a supervisor's gift. $25 limit each plus the wrapping

A worker may prefer to be treated as an independent contractor (rather than an employee) for which of the following reasons: a. Avoids the cutback adjustment as to business meals. b. All of the self-employment tax is deductible for income tax purposes. c. Work-related expenses can be deducted. d. A Schedule C does not have to be filed. e. None of these.

C.

Aiden performs services for Lucas. Which, if any, of the following factors indicate that Aiden is an employee, rather than an independent contractor? a. Aiden provides his own support services (e.g., work assistants). b. Aiden obtained his training (i.e., job skills) from his father. c. Aiden is paid based on hours worked. d. Aiden makes his services available to others. e. None of these.

C.

Which, if any, of the following expenses are deductible? a. Tax return preparation fee paid by a non-employed retiree. b. Safety shoes purchased by an plumber employed by a company. c. Bottled water purchased by a gig driver for passengers. d. None of these. e. Unreimbursed employee expenses.

C.

Jermaine and Kesha are married, file a joint tax return, have AGI of $82,500, and have two children. Devona is beginning her freshman year at State University during Fall 2014, and Arethia is beginning her senior year at Northeast University during Fall 2014 after having completed her junior year during the spring of that year. Both Devona and Arethia are claimed as dependents on their parents' tax return. Devona's qualifying tuition expenses and fees total $4,000 for the fall semester, while Arethia's qualifying tuition expenses and fees total $6,200 for each semester during 2014. Full payment is made for the tuition and related expenses for both children during each semester. The American Opportunity credit available to Jermaine and Kesha for 2014 is: a. $2,500. b. $3,000. c. $5,000. d. $6,000. e. None of these.

C. $2500 per student

Harry and Wilma are married and file a joint income tax return. On their tax return, they report $44,000 of adjusted gross income ($20,000 salary earned by Harry and $24,000 salary earned by Wilma) and claim two exemptions for their dependent children. During the year, they pay the following amounts to care for their 4-year old son and 6- year old daughter while they work. ABC Day Care Center $3,200 Blue Ridge Housekeeping Services 2,000 Mrs. Mason (Harry's mother) 1,000 Harry and Wilma may claim a credit for child and dependent care expenses of: a. $840. b. $1,040. c. $1,200. d. $1,240. e. None of these.

C. (6000 * 20%)

During 2014, Nancy paid the following taxes: Tax on residence (for the period from March 1 through August 31, 2014) $5,250 State motor vehicle tax (based on the value of the personal use automobile) 430 State sales tax 3,500 State income tax 3,050 Nancy sold her personal residence on June 30, 2014, under an agreement in which the real estate taxes were not prorated between the buyer and the seller. What amount qualifies as a deduction from AGI for 2014 for Nancy? a. $9,180 b. $9,130 c. $7,382 d. $5,382 e. None of these

C. {(121 days/184 days *5250) + 430 + 3500}

Amy works as an auditor for a large major CPA firm. During the months of September through November of each year, she is permanently assigned to the team auditing Garnet Corporation. As a result, every day she drives from her home to Garnet and returns home after work. Mileage is as follows: Miles Home to office 10 Home to Garnet 30 Office to Garnet 35 For these three months, Amy's deductible mileage for each workday is: a. 0. b. 30. c. 35. d. 60. e. None of these.

D.

Dave is the regional manager for a national chain of auto-parts stores and is based in Salt Lake City. When the company opens new stores in Boise, Dave is given the task of supervising their initial operation. For three months, he works weekdays in Boise and returns home on weekends. He spends $350 returning to Salt Lake City but would have spent $410 had he stayed in Boise for the weekend. As to the weekend trips, how much, if any, qualifies as a deduction? a. $0, since the trips are personal and not work related. b. $0, since Dave's tax home has changed from Salt Lake City to Boise. c. $60 d. $350 e. $410

D.

In the current year, Jerry pays $8,000 to become a charter member of Mammoth University's Athletic Council. The membership ensures that Jerry will receive choice seating at all of Mammoth's home basketball games. Also this year, Jerry pays $2,200 (the regular retail price) for season tickets for himself and his wife. For these items, how much qualifies as a charitable contribution? a. $8,000 b. $6,400 c. None of the above d. $0 e. $10,200

D.

Jordan performs services for Ryan. Which, if any, of the following factors indicate that Jordan is an independent contractor, rather than an employee? a. Ryan sets the work schedule. b. Ryan provides the tools used. c. Jordan files a Form 2106 with his Form 1040. d. Jordan is paid based on tasks performed e. None of these.

D.

Phillip, age 66, developed hip problems and was unable to climb the stairs to reach his second-floor bedroom. His physician advised him to add a first-floor bedroom to his home. The cost of constructing the room was $32,000. The increase in the value of the residence as a result of the room addition was determined to be $17,000. In addition, Phillip paid the contractor $5,500 to construct an entrance ramp to his home and $8,500 to widen the hallways to accommodate his wheelchair. Phillip's AGI for 2019 was $100,000. How much of these expenditures can Phillip deduct as a medical expense in 2019? a. $14,000 b. $15,000 c. $21,500 d. $19,000 e. None of these

D.

Quinn, who is single and lives alone, is physically handicapped as a result of a diving accident. In order to live independently, he modifies his personal residence at a cost of $30,000. The modifications included widening halls and doorways for a wheelchair, installing support bars in the bathroom and kitchen, installing a stairway lift, and rewiring so he could reach electrical outlets and appliances. Quinn pays $200 for an appraisal that places the value of the residence at $129,000 before the improvements and $140,000 after. As a result of the operation of the stairway lift, Quinn experienced an increase of $680 in his utility bills for the current year. Disregarding the AGI floor for medical expenses, how much of the above expenditures qualify as medical expense deductions? a. $34,880 b. None of the above c. $11,680 d. $30,680 e. $30,880

D.

Statutory employees: a. Report their expenses as miscellaneous itemized deductions. b. Are subject to income tax withholdings. c. Include common law employees. d. Claim their expenses as deductions for AGI. e. None of these

D.

Under the actual expense method, which, if any, of the following expenses will not be allowed? a. None of the above. b. Auto club dues. c. Auto insurance. d. Parking fines incurred during business use of a car. e. Interest expense on a car loan (taxpayer is self-employed).

D.

The § 222 deduction for tuition and related expenses is available: a. Regardless of the amount of a taxpayer's MAGI. b. To cover room and board expenses to attend college. c. To a married taxpayer filing a separate return. d. Even if a taxpayer does claim the standard deduction. e. None of these.

D. (because it is for AGI)

In which, if any, of the following situations is the automatic mileage available? a. A limousine to be rented by the owner for special occasions (e.g., weddings, high school proms). b. The auto belongs to taxpayer's mother. c. One of seven cars used to deliver pizzas. d. MACRS statutory percentage method has been claimed on the automobile. e. None of these.

E.

Which of the following statements is true regarding the education tax credits? a. The lifetime learning credit is available for qualifying tuition and related expenses incurred by students pursuing only graduate degrees. b. The American Opportunity credit permits a maximum credit of 20% of qualified expenses up to $10,000 per year. c. The American Opportunity credit is calculated per taxpayer, while the lifetime learning credit is available per eligible student. d. Continuing education expenses do not qualify for either education credit. e. None of these statements is true.

E.

During the current year, Ralph made the following contributions to the University of Oregon (a qualified charitable organization): Cash $63,000 Stock in Raptor, Inc. (a publicly traded corporation) 94,500 Ralph acquired the stock in Raptor, Inc., as an investment fourteen months ago at a cost of $42,000. Ralph's AGI for the year is $189,000. What is Ralph's charitable contribution deduction for the current year? a. $157,500 b. None of the above c. $63,000 d. $56,700 e. $94,500

E. (50% of agi)

During the year, Sophie (a self-employed marketing consultant) went from Omaha to Lima (Peru) on business. She spent four days on business, two days on travel, and four days on vacation. Disregarding the vacation costs, Sophie's expenses are: Air fare$3,000 Lodging 800 Meals 600 Entertainment 400 Sophie's deductible expenses are: a. $2,500. b. $4,300. c. $2,800. d. None of these. e. $2,900.

E. 2900 (allocate the transportation)

Corey is the city sales manager for "RIBS," a national fast food franchise. Every working day, Corey drives his car as follows: Miles Home to office 20 Office to RIBS No. 1 15 RIBS No. 1 to No. 2 18 RIBS No. 2 to No. 3 13 RIBS No. 3 to home 30 Corey renders an adequate accounting to his employer. As a result, Corey's reimburseable mileage is: a. 0 miles. b. 66 miles. c. 50 miles. d. 76 miles. e. None of these

E. None of these (it should be 46 miles)

During the year, John went from Milwaukee to Alaska on business. Preceding a five-day business meeting, he spent four days vacationing at the beach. Excluding the vacation costs, his expenses for the trip are: Air fare $3,200 Lodging 900 Meals 800 Entertainment 600 Presuming no reimbursement, deductible expenses are: a. $3,200. b. $3,900. c. $4,800. d. $5,500. e. None of these.

E. it should be $4500

Paul, a calendar year married taxpayer, files a joint return for 2014. Information for 2014 includes the following: AGI $175,000 State income taxes 13,500 State sales tax 3,000 Real estate taxes 18,900 Gambling losses (gambling gains were $12,000) 6,800 Paul's allowable itemized deductions for 2014 are: a. $13,500. b. $32,400. c. $39,200. d. $42,200. e. None of these.

E. it should be 16800

Refundable tax credits include the: a. Foreign tax credit. b. Tax credit for rehabilitation expenses. c. Credit for certain retirement plan contributions. d. Earned income credit. e. None of these.

d.

Noelle received dining room furniture as a gift from her friend, Jane. Jane's adjusted basis was $9,200 and the fair market value on the date of the gift was $7,000. Noelle decided she did not need the furniture and sold it to a neighbor six months later for $6,500. What is her recognized gain or loss? a. $0 b. ($500) c. ($2,700) d. $6,500 e. None of these

a. its personal use

In Lawrence County, the real property tax year is the calendar year. The real property tax becomes a personal liability of the owner of real property on January 1 in the current real property tax year (assume this year is not a leap year). The tax is payable on June 1. On May 1, Reggie sells his house to Dana for $350,000. On June 1, Dana pays the entire real estate tax of $7,950 for the year ending December 31. How much of the property taxes may Reggie deduct? a. $0 b. $2,614 c. $2,625 d. $7,950 e. None of these

b.

Pedro's child attends a school operated by the church the family attends. Pedro made a donation of $1,000 to the church in lieu of the normal registration fee of $200. In addition, Pedro paid the regular tuition of $6,000 to the school. Based on this information, what is Pedro's charitable contribution? a. $7,000 b. $800 c. $1,000 d. $0 e. $6,800

b.

Shontelle received a gift of income-producing property with an adjusted basis of $49,000 to the donor and fair market value of $35,000 on the date of gift. No gift tax was paid by the donor. Shontelle subsequently sold the property for $31,000. What is the recognized gain or loss? a) $0 b) ($4,000) c) ($10,000) d) ($18,000) e) None of the above

b.

Brad, who uses the cash method of accounting, lives in a state that imposes an income tax (including withholding from wages). On April 14, 2014, he files his state return for 2013, paying an additional $600 in state income taxes. During 2014, his withholdings for state income tax purposes amount to $3,550. On April 13, 2015, he files his state return for 2014 claiming a refund of $800. Brad receives the refund on June 3, 2015. If he itemizes deductions, how much may Brad claim as a deduction for state income taxes on his Federal income tax return for calendar year 2014 (filed in April 2015)? a. $3,350 b. $3,550 c. $4,150 d. $5,150 e. None of these

c.

Rick and Carol Ryan, married taxpayers, took out a mortgage of $160,000 when purchasing their home ten years ago. In October of the current year, when the home had a fair market value of $200,000 and they owed $125,000 on the mortgage, the Ryans took out a home equity loan for $110,000. They used the funds to purchase a sailboat to be used for recreational purposes. The sailboat does not qualify as a residence. What is the maximum amount of debt on which the Ryans can deduct home equity interest? a. $75,000 b. $90,000 c. $110,000 d. $125,000 e. None of these

d.

Which of the following statements concerning the credit for child and dependent care expenses is not correct? a. A taxpayer is not allowed both an exclusion from income and the credit for child and dependent care expenses on the same amount. b. A taxpayer is not allowed both a deduction as a medical expense and the credit for child and dependent care expenses on the same amount. c. If a taxpayer's adjusted gross income exceeds $43,000, the rate for the credit for child and dependent care expenses is 20%. d. If a taxpayer's adjusted gross income exceeds $15,000 but is not over $17,000, the rate for the credit for child and dependent care expenses is 35%. e. All of these are correct.

d.

Bob and Sally are married, file a joint tax return, have AGI of $112,000, and have two children. Del is beginning her freshman year at State College during Fall 2014, and Owen is beginning his senior year at Southwest University during Fall 2014. Owen completed his junior year during the Spring semester of 2013 (i.e., he took a "leave of absence" during the 2013-2014 school year). Both Del and Owen are claimed as dependents on their parents' tax return. Del's qualifying tuition expenses and fees total $5,000 for the Fall semester, while Owen's qualifying tuition expenses were $6,100 for the Fall 2014 semester. Del's room and board costs were $3,200 for the Fall semester. Owen did not incur room and board costs since he lived with his aunt and uncle during the year. Full payment is made for the tuition and related expenses for both children at the beginning of each semester. In addition to the children's college expenses, Bob also spent $3,000 on professional education seminars during the year in order to maintain his license as a practicing dentist. Bob attended the seminars during July and August 2014. Compute the available education tax credits for Bob and Sally for 2014. a. $3,100 b. $5,000 c. $5,480 d. $5,600 e. None of these

d. no phaseout for 2019, until MFJ AGI is over 116,000.

Joseph and Sandra, married taxpayers, took out a mortgage on their home for $350,000 15 years ago. In May of this year, when the home had a fair market value of $450,000 and they owed $250,000 on the mortgage, they took out a home equity loan for $220,000. They used the funds to purchase a single engine airplane to be used for recreational travel purposes. What is the maximum amount of debt on which they can deduct home equity interest? a. $50,000 b. $100,000 c. $220,000 d. $230,000 e. None of these

e. it should be $250,000, what is remaining on the mortgage. they cannot deduct the home equity loan because it is for personal reasons

George and Martha are married and file a joint tax return claiming their two children, ages 10 and 8 as dependents.Assuming their AGI is $119,650, George and Martha's child tax credit is: a. $0. b. $1,000. c. $1,500. d. $2,000. e. None of these.

e. it should be $4000

Albert purchased a tract of land for $140,000 in 2011 when he heard that a new highway was going to be constructed through the property and that the land would soon be worth $200,000. Highway engineers surveyed the property and indicated that he would probably get $180,000. The highway project was abandoned in 2014 and the value of the land fell to $100,000. What is the amount of loss Albert can claim in 2014? a. $40,000 b. $60,000 c. $80,000 d. $100,000 e. None of these

e. nothing was sold