EA Part 1

Keith and Margaret had adjusted gross income of $100,00. They had real estate taxes of $4,000, mortgage interest of $12,000, home equity loan interest of $6,000 used to substantially improve the residence, automobile loan interest of $3,000, second home mortgage interest of $4,000, and credit card interest of $2,000. The total allowable interest deduction is A. $31,000 B. $24,000 C. $22,000 D. $18,000

C. $22,000

In 2017, Tony received a gift of 200 shares of mutual funds stock. The stock was worth $20,000 when Tony received it. The donor had originally paid $10,000 for the stock when he bought it in 2013. Tony sold the stock for $15,000 in 2018. What is Tony's basis in the stock, disregarding gift tax? A. $0 B. $20,000 C. $10,000 D. $15,000

$10,000

Mr. and Mrs. Smith are both employed and file joint federal income tax returns. Both Mr. and Mrs. Smith are covered by their employers' retirement plans. For 2018, Mr. Smith's salary was $39,000 and Mrs. Smith's was $13,000. They both have IRAs, and their combined modified adjusted gross income was $50,000. Mr. Smith contributed $5,500 to his IRA, and Mrs. Smith contributed $2,750 to her IRA. What is the maximum IRA deduction each is entitled to for 2018? A. $5,500 $2,750 B. $0 $0 C. $2,750 $1,375 D. $0 $2,750

A. $5,500 $2,750

For purposes of claiming the Child Tax Credit, which of the following is NOT true for a qualifying child. A. Child must be under age 16 at the end of the year. B. Child must be a citizen or resident of the United States. C. Child must be claimed as your dependent D. Child may an eligible foster child.

A. Child must be under age 16 at the end of the year.

The Minimum Tax Credit (MTC) allocable for the current year is limited to A. Current-year gross regular tax (reduced by certain credits) minus current-year tentative minimum tax. B. Current-year gross regular tax (without regard to any credits) minus current-year tentative minimum tax. C. Current-year gross regular tax (reduced by certain credits) plus current-year tentative minimum tax. D. Current-year gross regular tax (reduced by certain credits) minus previous-year tentative minimum tax.

A. Current-year gross regular tax (reduced by certain credits) minus current-year tentative minimum tax.

For the current-year, for purposes of the Earned Income Credit, which of the following amounts qualifies as earned income? A. Earnings from self-employment. B. Excluded combat-zone pay C. Unemployment compensation D. Value of meals or lodging provided by an employer for the convenience of the employer.

A. Earnings from self-employment

To qualify for a medical expense deduction as your dependent, a person must be your dependent either at the time the medical services were provided or at the time you paid the expenses. A person generally qualifies as your dependent for purposes of the medical deduction if A. The person would qualify as a dependent except for the amount of gross income. B. The person was a foreign student staying briefly at your home. C. The person is your siblings unmarried adult child. D. The person is the unrelated caregiver for your elderly parents.

A. The person would qualify as a dependent except for the amount of gross income.

John and Fred owned, as joint tenants with right of survivorship, business property that they purchased for $40,000. John furnished one-fourth of the purchase price, and Fred furnished three-fourths of the purchase price. Depreciation deductions allowed before Fred's death were $8,000. Under local law, each had a one-half interest in the income from the property. At the time of Fred's death, the fair market value of the property was $80,000, three-fourths of which is includible in Fred's estate. What is John's basis in the property at the date of Fred's death? A. $80,000 B. $60,000 C. $66,000 D. $56,000

C. $66,000

Alex bought four shares of common stock for $200. Later the corporation distributed a share of preferred stock for every two shares of common. At the date of distribution, the common stock had a FMV of $60 and preferred stock had a FMV of $40. What is Alex's basis in the common stock and the preferred stock after the nontaxable stock dividend? A. $200 common; $80 preferred B. $150 common; $50 preferred C. $60 common; $40 preferred D. $240 common; $80 preferred

B. $150 common; $50 preferred

During 2018, Julia received a dividend payment from Corporation X in the amount of $500 and a distribution (return of capital payment) on the Block B shares in the amount of $800. Julia had originally purchased Corporation X stock for $2,000 in 2009 (Block A) and purchased additional Corporation X stock for $1,000 (Block B) in 2010. Julia's basis in each of the two blocks of stock at the end of 2018, assuming no other transactions, is Block A Block B A. $700 $200 B. $2,000 $200 C. $1,466 $734 D. $1,200 $1,000

B. $2,000 $200

In the current year, Maria paid the following taxes: Special assessment to provide local benefits: $2,500 County real estate taxes paid on her vacation home: $1,250 Sales tax paid when she purchased a new auto: $900 Personal property taxes paid to her local government: $350 What amount is allowable as an itemized deduction for the current year? A. $1,250 B. $2,500 C. $3,750 D. $5,000

B. $2,500

Charles, the landlord, made several repairs and improvements to his rental house. He spent $1,500 to add carpeting in the hallway, $550 for a stove, $750 for a refrigerator, $170 to replace the broken faucet in the bathroom, and $590 to replace damaged shingles on the roof. How much of these costs must be depreciate. A. $3,560 B. $2,800 C. $1,300 D. $3,390

B. $2,800

Mr. Nehru had the following capital transactions during the current year: Short-term capital gain $1,000 Short-term capital loss $2,700 Long-term capital gain $6,500 Long-term capital loss $1,800 What is the amount of Mr. Nehru's capital gain net income (or loss) on his current year Schedule D? A. $7,500 B. $3,000 C. $4,700 D. $(3,000)

B. $3,000

In 2017, Ted and Alice had an alternative minimum tax liability of $19,000. This is the first tax year in which they ever paid the alternative minimum tax. They recomputed the alternative minimum tax using only exclusion preferences and adjustments. This resulted in an $8,500 alternative minimum tax liability. In 2018, Ted and Alice have a regular tax liability of $45,000. Their tentative minimum tax liability is $42,000. What is the Minimum Tax Credit carryover to 2019? A. $19,000 B. $16,000 C. $7,500 D. $0

C. $7,500

Nature Corporation declared and distributed a stock dividend of 1 share for each 10 shares held by shareholders. Donna had 100 shares ($5.50 per share basis) and received 10 additional shares with a fair market value of $6.00 per share. Which of the following is most applicable to the stock dividend? A. 100 shares at $5.50 per share basis and 10 shares at zero basis per share. B. 110 shares at $5 per share basis and $55 taxable income C. 110 shares at $5 per share D. 100 shares at $5 per share basis and 10 shares at $6 per share basis

C. 110 shares at $5 per share

Which of the following is deductible as medical insurance? A. Medical portion of auto insurance policy the provides coverage for all persons injured in or by the taxpayer's car. B. Insurance policy that pays you $50 a day if you are unable to work due to illness or injury. C. Medicare Part B. D. None of the answers are correct.

C. Medicare Part B.

Which one of the following could prevent an individual from qualifying for the Child and Dependent Care Credit? A. Unearned income of more than $400 B. Paying for care for more than one qualifying person C. Not identifying the care provider on the tax return D Paying for child care while looking for work

C. Not identifying the care provider on the tax return

Jerry, a general contractor by trade, is a tenant of Montgomery Apartments. In exchange for 4 months' rent ($900/month), Jerry provided the following items and services for Paul, the owner of the apartments: Paint and miscellaneous supplies for the apartments $ 700 Labor for painting and miscellaneous repairs 1,000 Labor and supplies for paving the apartment parking area 1,900 How should Paul treat this transaction on his current-year Schedule E? A. Rental income of $3,600 and depreciation computed on the capital expenditures of $3,600 B. Rental income of $3,600 and rental expenses of $3,600 C. Rental income of $3,600 and rental expenses of $1,700, and depreciation computed on the capital expenditures of $1,900 D. No rental income or rental expenses on the Schedule E because the net effect is zero

C. Rental income of $3,600 and rental expenses of $1,700, and depreciation computed on the capital expenditures of $1,900

Taxes deductible as an itemized deduction up to $10,000 include all of the following EXCEPT A. State and local real estate taxes based on the assessed value of the property and charged uniformly against all property. B. State and local incomd taxes. C. Taxes that the taxpayer paid on property owned by his or her parents or children. D. Personal property taxes based on the value of the personal property.

C. Taxes that the taxpayer paid on the property owned by his or her parents or children.

The holding period for determining short-term and long-term gains and losses includes which of the following? A. The day you acquired the property B. In the case of a bank that repossessed real property, the time between the original sale and the date of repossession C. The donor's holding period in the case of a gift if your basis is the donor's adjusted basis. D. All of the answers are correct.

C. The donor's holding period in the case of a gift if your basis is the donor's adjusted basis.

Jerry received 2 acres of land valued at $10,000 as a gift. The donor's adjusted basis was $12,000. Jerry subsequently sold the land for $20,000. For purposes of computing his gain, what is Jerry's basis in the land? A. $12,000 B. $10,000 C. $8,000 D. $2,000

A. $12,000

Yang and May Ling (husband and wife) owned a fashionable handbag store in New York, which they report as a sole proprietorship on their individual return. They had the following types of transactions during the 2018 year: $600,000 gain from the sale of a rare coin collection May Ling inherited in February of 2017. The sale occurred in the month of July $100,000 received in accounts receivable from sales of 500 bags in November 2018 $50,000 gain from sale of stocks held in their personal account that were purchased in 2016 $5,000 for purchase of supplies, such as computer paper, invoices, etc., used in the business From the information provided, what is the proper gross amount and characterization of capital transactions that Yang and May Ling should report for the year 2018? A. $650,000 as long-term capital gain B. $695,000 as ordinary income C. $50,000 as long-term capital gain D. $95,000 as short-term capital gain

A. $650,000 as long-term capital gain

On June 1, 2018, Kirk received a gift of income-producing real estate having donor's adjusted basis of $50,000 at the date of the gift. The fair market value of the property at the date of the gift was $40,000. Kirk sold the property for $46,000 on August 1, 2018. How much gain or loss should Kirk report for 2018? A. No gain or loss. B. $4,000 short-term capital loss C. $4,000 ordinary loss D. $6,000 short-term capital gain

A. No gain or loss

Maggie trades stock in ABC Company with an adjusted basis of $7,000 for DEF Company stock with a fair market value of $10,000. She had no other transactions during the year. What is the amount realized and what is her gain or loss on this transaction? A. The amount realized is $10,000, and the amount of gain is $3,000 B. The amount realized is $10,000, and the amount of loss is $3,000 C. The amount realized is $7,000, and the amount of gain is $4,000 D. The amount realized is $17,000, and the amount of gain is $3,000

A. The amount realized is $10,000, and the amount of gain is $3,000

Ruth had wages of $34,000, and her husband John's wages were $27,000. They have three children ages 3, 6, and 9. They had a total of $7,200 to Creative Child Care School, Inc. Assuming a 20% credit rate, what will be their Child Care Credit? A. $1,440 B. $1,200 C. $6,000 D. $7,200

B. $1,200

Herb files single and had the following capital gains and losses in 2018: $500 loss on the sale of stock he purchased on January 14, 2018, and sold on August 10, 2018 $5,000 loss on the sale of stock purchased October 1, 2017, and sold November 1, 2018 $1,000 gain on the sale of a vacant lot held for 5 years How should Herb's capital gains and losses be initially reported on Schedule D? A. $4,500 long-term loss B. $4,000 long-term loss and $500 short-term loss C. $4,500 long-term loss and $1,000 short-term loss D. $5,500 long-term loss and $1,000 short-term gain

B. $4,000 long-term loss and $500 short-term loss

In Year 1, Nancy bought 100 shares of Trauna, Inc., for $5,000, or $50 a share. In Year 2, Nancy bought 100 shares of Trauna stock for $8,000, or $80 a share. In Year 3, Trauna declared a 2-for-1 stock split. Nancy sold 50 shares of the stock she received from the stock split for $2,000. She could not definitely identify the shares she sold. What is the amount of Nancy's net capital gain from this sale for Year 3? A. $0 B. $750 C. $1,625 D. $2,000

B. $750

Mr. and Mrs. Able are investors in a mutual fund that is not part of a qualified retirement plan. For 2018, the fund notified them that it had allocated a $9,500 long-term capital gain in their account. Of this total, only $4,500 was distributed in 2018. In addition, the fund paid $500 federal tax on their behalf. What is the correct amount of long-term capital gain that the Ables should report on their 2018 tax return? A. $10,000 B. $9,500 C. $5,000 D. $4,500

B. $9,500

Shannon and Dan Smith (wife and husband) purchased Section 1244 (small business) stock in 2018. Which of the following statements is true? A. If they incurred a loss on Section 1244 stock, they can deduct the loss as a capital loss rather than as an ordinary loss. B. If the stock becomes worthless, they can claim an ordinary loss limited to $50,000 individually or $100,000 together on a joint return, per year. C. If the loss is $60,000 and Shannon does not have any other losses, Dan can only deduct $50,000 as ordinary loss on the joint return. D. If they incurred a gain on Section 1244 stock, they should treat it as ordinary gain.

B. If the stock becomes worthless, they can claim an ordinary loss limited to $50,000 individually or $100,000 together on a joint return, per year.

Ms. B filed her Year 1 Form 1040 on April 15, Year 2, but did not pay her tax liability of $3,000. On June 15, Year3, she paid the tax in full. In Year 4, Ms. B discovered additional deductions for Year 1 that will result in a refund of $1,000. To receive her refund, Ms. B must file an amended income tax return by (assuming no relevant days are Saturdays, Sundays, or holidays) A. April 15, Year 5 B. June 15, Year 5 C. April 15, Year 6 D. June 15, Year 6

B. June 15, Year 5

Which of the following would disqualify points from being fully deductible in the year paid? A. The points were computed as a percentage of the amount of the mortgage. B. The loan proceeds were used to purchase a second home. C. The payment of points is common in your area. D. The points are clearly stated on the settlement statement.

B. The loan proceeds were used to purchase a second home.

Vanessa inherited 100 shares from her grandmother when her grandmother died on December 10, 2017. At that time, the fair market value of the stock was $50 per share. Vanessa's grandmother paid $40 per share. If Vanessa sells all 100 shares for $60 per share on June 30, 2018, how should she report the sale on her return for 2018? A. $1,000 short-term capital gain B. $2,000 short-term capital gain C. $1,000 long-term capital gain D. $2,000 long-term capital gain

C. $1,000 long-term capital gain

Sam purchased 100 shares of stock in 2008 for $2,500. The company had no earnings or profits in 2017 or 2018. In 2017, Sam received a return of capital distribution on that stock of $2,000, and in 2018, he received a second return of capital distribution on that stock of $2,000. What amount should he report on his 2018 tax return? A. Nothing until the shares are sold B. $1,500 as ordinary dividend income C. $1,500 as long-term capital gain income. D. $2,000 as return of capital income

C. $1,500 as long-term capital gain income

Kiran bought stock in the Big Bang Corporation in 2013 for $2,000. In 2017, Kiran received a return of capital distribution of $100 as a partial return on her investment. In 2018, Kiran sold the stock for $3,000. Her basis in the stock is A. $3,000 B. $2,100 C. $1,900 D. $2,000

C. $1,900

Larry purchased stock in 2013 for $100. During 2016, he received a return of capital of $80 on this stock. During 2018, he received another return of capital of $30. Larry had no other stock transactions in 2018. What amount should he report on his 2018 income tax return, and what is his basis in the stock at the end of 2018? A. $30 capital gain, $100 stock basis B. $30 dividend income, $100 stock basis C. $10 capital gain, zero stock basis D. $10 dividend income, zero stock basis.

C. $10 capital gain, zero stock basis

John is a furniture maker and carpenter. John makes half of his income as an employee of Concept Designs, Inc., a fine furniture manufacturing corporation. He makes the other half of his income from a personal business where he purchases, renovates, and then resells houses. In January of 2018, John purchases a house that is not his residence for $50,000. He spends $10,000 in materials renovating the house, which he sells in November of 2018 for $90,000. What is the amount and character of John's gain from this transaction? A. $20,000 ordinary gain B. $30,000 short-term capital gain C. $30,000 ordinary gain D. $20,000 short-term capital gain

C. $30,000 ordinary gain

Sharon sold two collections during 2018. These were her only sales. Determine the amount and character of her gains (losses) on these sales. Coin collection she began as a child with a basis of $1,000, sold for $5,000 Collection of original short stories she wrote in 2015, sold for $20,000 A. $20,000 long-term capital gain B. $24,000 long-term capital gain C. $4,000 long-term capital gain and $20,000 ordinary income D. $24,000 ordinary income

C. $4,000 long-term capital gain and $20,000 ordinary income

For which of the following dependent children will a parent NOT be allowed a Child Tax Credit? A. 15-year-old daughter B. 12-year-old foster child C. 19-year-old stepchild D. 16-year-old grandchild

C. 19-year-old step child.

In computing the gain or loss from a sale or trade in property, which statement below best describes the amount you realize? A. The money you actually receive B. The fair market value of the property on the transaction date C. Everything you receive for the property D. The value of any services you received

C. Everything you receive for the property

Elton declared bankruptcy in the current year. Included in the liabilities discharged in the bankruptcy was a $15,000 personal loan Elton had received from his friend, Edward, 2 years ago. How would Edward treat this for tax purposes? A. Ordinary loss on Form 4797 B. Long-term capital loss on Schedule D C. Short-term capital loss on Schedule D D. Investment expense

C. Short-term capital loss on Schedule D

Small business stock under Sec. 1202 is subject to special taxation. Which of the following statements is false regarding this stock? A. There is up to a 100% exclusion from gain on stock held more than 5 years. B. The gain may be deferred if reinvested in other qualified small business stock within 60 days of the sale C. The AMT preference on the small business stock is 50% of the excluded gain D. C corporation stock is eligible for the small business stock provisions

C. The AMT preference on the small business stock is 50% of the excluded gain

Which of the following is the depreciable basis in rental property that is placed in service immediately upon receiving it as a gift if the donor's basis was more than the fair market value of the property? A. The fair market value on the date of the gift plus or minus any required adjustments to basis B. The fair market value of the property on the date of conversion to rental property C. The donor's basis of the property plus or minus any required adjustments to basis. D. All of the answers are correct

C. The donor's basis of the property plus or minus any required adjustments to basis.

Karen Smith bought Coca-Cola stock for $475 on March 31, 2018. On November 15, 2018, Karen received a non-taxable distribution of $155 on the 50 shares of stock she owned. She sold the stock for $300 on December 22, 2018. What is her gain or loss on the sale? A. $175 gain B. $175 loss C. $20 gain D. $20 loss

D. $20 loss

A married couple has $150,000 of taxable income made up of $100,000 of ordinary income, a $200,000 long-term loss subject to the 15% rate, and $350,000 received in the sale of a residential building in 2018 that they had purchased in 1985 for $300,000. The building had a basis of $100,000. Assume that depreciation recapture at ordinary income rates is $10,000. What are the amount and the character of their capital gain (loss) after netting the gains and losses? A. $0 B. $200,000 long-term capital gain taxed at 15% C. $40,000 long-term capital gain taxed at 15% D. $40,000 long-term capital gain taxed at 25%

D. $40,000 long-term capital gain taxed at 25%

Chris flew to Chicago for surgery. He incurred the following costs in connection with the trip: Round-trip airfare: $350 Lodging ($100/night x 2 nights): $200 Restaurant meals: $80 Hospital and surgeon: $5,000 What is Chris's medical expense? A. $5,490 B. $5,630 C. $5,000 D. $5,450

D. $5,450

Paula received notice that her mutual fund had allocated a long-term capital gain to her account in 2018 in the amount of $3,500 and had paid federal tax on her behalf in the amount of $1,225 on the gain. No amount was to be paid to Paula on the gain, but it would be credited to her account. All of the following statements are true EXCEPT A. Paula is allowed a credit for the federal tax paid of her behalf of $1,225 B. Paula will report a long-term capital gain of $3,500 C. Paula will increase her basis in the stock by $2,275 D. Paula will not report any gain because nothing was paid to her

D. Paula will not report any gain because nothing was paid to her

Which of the following is NOT a test to determine if a child is a qualifying child for the Earned Income Credit (EIC)? A. Relationship B. Age C. Residency D. Support

D. Support

During the current year, Ms. Gonzales paid $2,000 for local real estate taxes on property she rents to others and $3,425 real estate taxes on her residence. In addition, she paid gift taxes of $650 and $1,250 for state income taxes to New Jersey.What amount can Ms. Gonzales deduct as an itemized deduction on her tax return for the current year? A. $4,675 B. $5,325 C. $6,675 D. $7,325

A. $4,675

Donna received land as a gift from her grandfather. At the time of the gift, the land had a fair market value of $80,000 and an adjusted basis of $100,000 to Donna's grandfather. One year later, Donna sold the land for $105,000. What was her gain or loss on this transaction? A. $5,000 B. $15,000 C. $20,000 D. No gain or loss

A. $5,000

Mr. Ng, sole proprietor of Wu Company, purchased a machine for use in his business. Mr. Ng's costs in connection with its purchase were as follows: Cash paid to seller $4,000 Note to seller $48,000 State sales tax $2,600 Machine repairs $800 Wage expense to install machine $3,200 What is the amount of Mr. Ng's basis in the machine? A. $54,600 B. $55,200 C. $58,600 D. $57,800

D. $57,800

Jane acquired an acre of land as a gift. At the time of the gift, the acre had a fair market value (FMV) of $20,000. The donor's adjusted basis in the land was $15,000. No gift tax was paid on the gift. No events occurred to increase or decrease her basis in the property. Jane later sold the acre for $10,000. What is Jane's gain or loss on the sale? A. $5,000 loss B. $10,000 loss C. $0 (no gain or loss) D. $10,000 gain

A. $5,000 loss

Virginia's earned income for 2018 was $24,000. She paid $3,000 to a qualifying child care center for the care of her 2-year-old son while she worked. She received $2,000 form Social Services to assist with her child care expenses. Compute Virginia's Child Care Credit for 2018 from the following excerpt from the child and dependent care table: If your adjusted gross income is: Then the percentage is: $0 - $15,000 35% $15,000 $17,000 34% $17,000 - $19,000 33% $19,000 - $21,000 32% $21,000 - $23,000 31% $23,000 - $25,000 30% $25,000 - $27,000 29% A. $300 B. $900 C. $930 D. $310

A. $300

For 2018, Mrs. Lynn had adjusted gross income of $30,000. During the year, she contributed $9,000 to her church, $10,000 to qualified public charities, and a painting she has owned for 8 years with a fair market value of $16,000 and a $4,000 adjusted basis to her city's library. What is the amount of Mrs. Lynn's charitable contributions deduction for the year? A. $18,000 B. $19,000 C. $23,000 D. $35,000

A. $18,000

Rev. Janice Burton is a full-time minister at the Downtown Missionary Church. The church allows her to use the parsonage that has an annual fair rental value of $4,800. The church pays an annual salary of $13,200, of which $1,200 is designated for utility costs. Her utility costs during the year were $1,000. What is Rev. Burton's income for self-employment tax purposes? A. $18,000 B. $13,200 C. $12,200 D. $13,400

A. $18,000

A taxpayer paid $7,000 of interest in 2018 on the mortgage given upon requiring her first home. The taxpayer received a mortgage credit certificate (MCC), which specifies a 30% credit rate. How much of a credit is the taxpayer entitled to in 2018? A. $2,000 B. $2,100 C. $5,000 D. $7,000

A. $2,000

John has a heart ailment. On his doctor's advice, he installed an elevator in his home so that he would not have to climb stairs. The cost of the elevator was $7,000. An appraisal shows that the elevator increased the value of his home by $5,000. John can claim a medical deduction of A. $2,000 B. $5,000 C. $7,000 D. None of the answers are correct

A. $2,000

In 2016, Mary purchased 10 shares of Acorn Corporation common stock for $100 per share. In 2017, Mary purchased an additional 10 shares of Acorn Corporation common stock for $200 per share. At the end of 2018, Acorn Corporation declared a 2-for-1 common-stock split. What is Mary's total basis in her Acorn Corporation common stock? A. $3,000 B. $4,000 C. $5,000 D. $6,000

A. $3,000

Thomas loaned a friend, Susan, $10,000 for a down payment on a home. Thomas and Susan signed a note in which Susan agreed to pay $100 a month with an interest rate of 4% until the loan was completely paid. Susan lost both her job and her home in 2017. In 2018, Susan filed bankruptcy and went to live with her mother. Thomas sued Susan in court for nonpayment in August 2018, but the court ruled the debt unenforceable because it had been discharged in bankruptcy. When Susan defaulted, the outstanding balance due on the note was $7,000. If Thomas had only wage income reportable during the year, how much would his deductible bad debt be in 2018, assuming that Thomas elected to treat the loss as a nonbusiness ordinary loss arising from a transaction entered into for profit? A. $3,000 B. $10,000 C. $6,900 D. $7,000

A. $3,000

During the current year, John donated $100 to the United Way, $200 to Veterans of Foreign Wars, and $300 to his neighbor whose home was destroyed by a tornado. How much is John's deduction for charitable contributions? A. $300 B. $400 C. $500 D. $600

A. $300

Darryl received several acres of land from his mother as a gift. At the time of the gift, the land had a fair market value of $95,000. The mother's adjusted basis in the land was $105,000. Two years later, Darryl sold the land for $90,000. No events occurred that increased or decreased Darryl's basis in the land. What was Darryl's gain or loss on the sale of the land? A. $(15,000) B. $(5,000) C. $5,000 D. $10,000

B. $(5,000)

Johnny has been divorced for 4 years. He failed to make his alimony and support payments. The court ordered him to pay $1,500 as interest on the back alimony and support payments. He paid jnterest of $1,000 on a car loan, $2,500 on his outstanding credit card balance, $6,000 on a home equity loan that was not used to substantially improve his residence, and $10,000 on his mortgage. Other interest payments amounted to $2,500 on various appliance loan payments. How much is Johnny's deductible interest? A. $18,500 B. $10,000 C. $23,500 D. $17,500

B. $10,000

Mark sold a building for $100,000 cash plus property with a fair market value (FMV) of $10,000. He had purchased the building 5 years ago for $85,000. He made $30,000 worth of improvements and deducted $25,000 for depreciation. The buyer assumed Mark's real estate taxes of $12,000 and mortgage of $20,000 on the building. What is the amount realized on the sale of the building? A. $110,000 B. $142,000 C. $130,000 D. $145,500

B. $142,000

Mr. Apple and Ms. Melon purchased a small apartment house at the beginning of 2011 for $400,000, which they held for investment. Each furnished one-half of the purchase price, and each had a half interest in the income from the property. They held the apartment in joint tenancy with the right of survivorship (i.e., a tenancy in which the interest of the first tenant to die passes to the survivor on the death of the first tenant to die). They depreciated the apartment house at the rate of $10,000 per year. On December 31, 2018, Mr. Apple died. At the date of Mr. Apple's death, the apartment house had an adjusted basis (cost minus depreciation) of $320,000 and fair market value of $550,000. What is Ms. Melon's basis as of the date of Mr. Apple's death? A. $500,000 B. $435,000 C. $400,000 D. $320,000

B. $435,000

Taxpayers A and B, filing a joint return, earned box 5 Medicare wages of $190,000 and $110,000, respectively. Determine the amount of additional Medicare tax they own on their final Form 1040. A. $0 B. $450 C. $2,700 D. $25,650

B. $450

A married couple has a $40,000 short-term capital loss, a $20,000 collectible long-term capital gain, and a $25,000 long-term capital gain subject to the 15% rate. What are the amount and the character of their capital gain (loss) after netting the gains and losses? A. $5,000 long-term gain taxed at 28% B. $5,000 long-term gain taxed at 15% C. $(20,000) short-term loss and $25,000 long-term gain taxed at 15% D. $0

B. $5,000 long-term gain taxed at 15%

Juan received a gift of property from his uncle. When the gift was made in 2018, the property had a fair market value of $100,000 and an adjusted basis to his uncle of $40,000. Gift tax on the transfer, completely paid by Juan's uncle, was $14,500. What is Juan's basis in the property? A. $40,000 B. $50,235 C. $60,000 D. $110,235

B. $50,235

Richard collected baseball cards as a hobby. Richard had shared his interest in this hobby with his niece Susan, who was also an avid card collector. At the time of his death in 2018, Richard's collection had a fair market value of $10,000 and an adjusted basis of $2,000, while Susan's collection had a fair market value of $5,000 and an adjusted basis of $1,000. Upon his death, Richard's entire card collection went to Susan. With the death of her uncle, Susan lost interest in the hobby and sold all of the cards for $20,000. What is Susan's gain on the sale of these baseball cards? A. $5,000 B. $9,000 C. $13,000 D. $17,000

B. $9,000

In March 2018, Jesse traded in a 2015 van for a new 2018 model. He used both the old van and the new van 75% for business. Jesse has claimed actual expenses for the business use of the old van since 2015. He did not claim a Sec. 179 deduction of the old or new van. Jesse paid $12,800 for the old van in June 2015. Depreciation claimed on the 2015 van was $7,388, which included 6 months for 2018. Jesse paid $9,800 cash in addition to a trade-in allowance of $2,200 to acquire the new van. What is Jesse's depreciable basis in the new van? A. $11,409 B. $9,562 C. $9,009 D. $9,000

B. $9,562

Ms. Willow operated a small manufacturing plant. During the year, she took delivery on a new plastic mold stamping machine. Her cost included the following: Cost of machine $88,000 Sales tax 4,000 Freight charges to deliver property to her 1,500 Excise taxes 2,000 What is Ms. Willow's basis in the machine? A. $88,000 B. $95,500 C. $89,500 D. $93,500

B. $95,500

During 2018, Mr. and Mrs. Duhon paid the following expenses for their son, Joel: Medical insurance premiums: $1,500 Contact lenses: $210 Household help recommended by a doctor: $2,200 For 2018, Joel had gross income of $9,850. Because Joel had gross income of $9,850, the Duhons did not claim him as a dependent. How much of Joel's medical expenses can Mr. and Mrs. Duhon include with their deductible medical expenses? A. $3,910 B. $1,710 C. $1,500 D. $0

B. 1,710

Marge Godfrey sold her investment property March 20, 2018, at a gain of $50,000. Marge expects to owe $10,000 in additional income taxes on this sale. She had a tax liability of $900 for 2017 and will have no withholding for 2018. Marge's first estimated tax payment is due on what date? A. April 30, 2018 B. April 15, 2018 C. January 31, 2019 D. June 15, 2018

B. April 15, 2018

If 100 shares of stock are purchased on February 14, 2018, what is the earliest date on which the stock can be sold and the gain or loss can qualify for the long-term holding period? A. August 14, 2019 B. February 15, 2019 C. February 14, 2019 D. August 15, 2019

B. February 15, 2019

All of the following statements concerning basis of property received for services are true EXCEPT A. If you receive property for services, your basis is equal to the fair market value of the property received. B. If your employer allows you to purchase property at less than fair market value, include the fair market value of the property in income. C. If you receive property for services and the property is subject to restrictions, your basis in the property is its fair market value when it becomes substantially vested D. If your employer allows you to purchase property at less than fair market value, your basis in the property is its fair market value.

B. If your employer allows you to purchase property at less than fair market value, include the fair market value of the property in income.

In 2018, Jonathan Smith paid his educational expenses at a community college where he completed his freshman year and began his sophomore year. His father, John Smith, provides more than half of the support for Jonathan and claims and exemption for him on his tax return. Which of the following is true? A. Jonathan is eligible to take the AOC on his 2018 tax return. B. John is eligible to take the AOC on his 2018 tax return. C. Jonathan and John may split the AOC between their 2018 tax returns D. Neither may take the AOC

B. John is eligible to take the AOC on his 2018 tax return.

On June 1, 2016, Mr. Smart purchased investment land. On January 31, 2017, Mr. Smart traded the land plus cash for some other investment land in a nontaxable exchange. On August 15, 2018, he sold the land received in the nontaxable exchange for a gain. What is the character of Mr. Smart's gain for 2018? A. Short-term capital gain B. Long-term capital gain C. Part short-term capital gain and part long-term capital gain D. Ordinary income

B. Long-term capital gain

David and Carmen were divorced in 2015. Under the final divorce decree, David was ordered to pay Carmen $800 a month for the support of their two children, who remained in the custody of Carmen. Over the next 2 years, David was very inconsistent in making child support payments to Carmen. In 2017, he missed three payments. In 2018, he made up one of the 2017 payments and missed five more payments. Assuming Carmen is a cash-basis taxpayer, what amount of nonbusiness bad debt may she claim in 2017 and 2018? A. $2,400 in 2017 and $3,200 in 2018 B. None in either year C. $2,400 in 2017 and $4,000 in 2018 D. $1,600 in 2017 and $4,000 in 2018

B. None in either year

Carol, an individual taxpayer, received a Form 1099-Div from her global mutual fund that showed dividend income of $500 and foreign taxes withheld of $70. This is the only foreign source income she received for the year. Her income tax before any credits is $4,320. On which of the following forms may Carol elect to claim a refund for the foreign tax paid? A. Schedule 5 (Form 1040), line 66, "2018 estimated tax payments...," with a disclosure statement. B. Schedule 3 (Form 1040), line 48, "Foreign tax credit" C. Form 1040, Schedule A, Itemized Deductions, line 6, "Other taxes" D. Form 1040, Schedule B, by electing to reduce the dividend income by $140 ($70 x 2).

B. Schedule 3 (Form 1040), line 48, "Foreign tax credit."

All of the following child and dependent care expenses may qualify as work-related for purposes of the Child and Dependent Care Credit EXCEPT A. The cost of care provided to a qualifying person outside the home. B. The cost of getting a qualifying person from the home to the care location and back. C. The cost of household services that are partly for the well-being of a qualifying person. D. The cost of sending a child to school if the child is in a grade below kindergarten and the cost is incident to and cannot be separated from the cost of care.

B. The cost of getting a qualifying person from the home to the care location and back.

Which of the following is the depreciable basis in the property that is placed in service after receiving it as a gift and treating it as personal property, if on the date of conversion that basis was more than the fair market value of the property? A. The fair market value on the date of the gift plus or minus any required adjustments to basis. B. The fair market value of the property on the date of conversion to rental property. C. The donor's basis of the property plus or minus any required adjustments to basis. D. All of the answers are correct.

B. The fair market value of the property on the date of conversion to rental property.

Violet made no estimated tax payments for 2018 because she thought she had enough tax withheld from her wages. In January 2019, she realized that her withholding was $2,000 less than the amount needed to avoid a penalty for the underpayment of estimated tax so she made an estimated tax payment of $2,500 on January 10, 2019. Violet filed her 2018 tax return on March 1, 2019, showing a refund due her of $100. Which of the following statements is NOT true regarding the estimated tax penalty? A. Violet will not owe a penalty for the quarter ending December 31, 2018, because she made sufficient payments before January 15, 2019. B. Violet will not owe a penalty for any quarter because her total payments exceed her tax liability. C. Violet could owe a penalty for one or all of the first three quarters even though she is due a refund for the year. D. If Violet owes a penalty for any quarter, the underpayment will be computed from the date the amount was due to the date they payment is made.

B. Violet will not owe a penalty for any quarter because her total payments exceed her tax liability.

All of the following statements regarding a return of capital distribution based on your stock are true EXCEPT A. A return of capital reduces the basis of your stock B. When the basis of your stock has been reduced to zero, you should report any additional return of capital as a capital loss C. Any liquidating distribution you receive is not taxable to you until you have recovered the basis of your stock D. If the total liquidating distributions you receive are less than the basis of your stock, you may have a capital loss

B. When the basis of your stock has been reduced to zero, you should report any additional return of capital as a capital loss

All of the following statements are true EXCEPT A. The totals for short-term capital gains and losses and the totals for long-term capital gains and losses must be figured separately. B. When you carry over any capital loss, its character will be long-term. C. If the total of your capital gains is more than the total of your capital losses, the excess is taxable D. The yearly limit on the amount of the capital loss you can deduct in excess of capital gains is $3,000 ($1,500 if you are married filing separately)

B. When you carry over any capital loss, its character will be long-term.

Liz incurred qualified adoption expenses of $14,000 in 2018. Liz's AGI for 2018 was $60,000. What is the amount of the credit Liz can take in 2018 for the adoption expenses she incurred? A $0 B. $7,000 C. $13,810 D. $14,000

C. $13,810

A taxpayer purchases rental property for $160,000. She uses $25,000 cash and obtains a mortgage for $135,000. She pays closing costs of $10,000, which include $5,000 in points on the mortgage and $5,000 for bank fees and title costs. Her initial basis in the property is A. $35,000 B. $170,000 C. $165,000 D. $160,000

C. $165,000

George had the following income and expenses: Interest and dividend income of $8,000 Gross wages of $100,000 Margin interest of $10,000 Mortgage interest of $6,000 Interest on a mobile home used as a second home, $3,000 Credit card interest of $2,000 How much interest can George deduct on Schedule A? A. $21,000 B. $18,000 C. $17,000 D. $19,000

C. $17,000

Ms. Seabreeze had the following during the current year: Taxable alimony received $6,000 Wages $14,000 Net loss from self-employment ($10,000) Interest income $5,000 For the purpose of an IRA. Ms. Seabreeze had compensation for thr current year of A. $25,000 B. $10,000 C. $20,000 D. $5,500

C. $20,000

Rabbit purchased a home for $200,000. He incurred the following additional expenses: $200 fire insurance premiums $500 mortgage insurance premiums $400 recording fees $250 owner's title insurance Compute his basis in the property. A. $201,350 B. $200,000 C. $200,650 D. $201,150

C. $200,650

Raul and Monika (husband and wife) are both lawyers, and they contribute money to various organizations each year. They file a joint return, and their adjusted gross income for 2018 is $100,000. They contributed to the following organizations in 2018: $5,000 to Alta Sierra country club $10,000 to prevent cruelty to animals $2,000 to state bar association (This state bar association is not a political subdivision of the state, serves both public and private purposes, and the funds used are unrestricted and can be for private purposes.) $12,000 to cancer research foundation Donated clothing to Salvation Army (Raul purchased the items for $1,000, but the fair market value of the same items at a thrift store is equal to $50.) How much can Raul and Monika deduct as charitable contributions for 2018? A. $29,050 B. $25,000 C. $22,050 D. $24,000

C. $22,050

Mr. Ratchet, a plumber, usually charges $40 per hour for his services. One of his customers gave him a painting in exchange for 4 hours of labor plus materials. The painting originally cost the customer $90 and had a current established fair market value of $250. There was no agreed-upon price before the work was done. What is the amount that Mr. Ratchet must include in income and what is his basis in the painting? Income. Basis A. $160. $250 B. $250. $90 C. $250. $250 D. $160. $90

C. $250. $250

In Year 1, Mr. Green received a gift of rental property from Mr. Blue. Mr. Blue retained the power to transfer this property to his son in his will. At the time of the gift, Mr. Blue's adjusted basis in the property was $18,000, and the property's fair market value was $24,000. No gift tax was paid. In Year 1 and Year 2, Mr. Green deducted a total of $2,000 of depreciation. In Year 3, Mr. Blue died but did not exercise his power to transfer the property. The rental property given to Mr. Green included in the gross estate as a revocable transfer. The value of the rental property for estate tax purposes was the fair market value at Mr. Blue's death, $28,000. What is Mr. Green's basis in the property after Mr. Blue's death. A. $18,000 B. $22,000 C. $26,000 D. $28,000

C. $26,000

For the current year, Gannon Corporation has U.S. taxable income of $500,000, which includes $100,000 from a foreign division. Gannon paid $45,000 of foreign income taxes on the income of the foreign division. Assuming Gannon's U.S. income tax for the current year before credits is $170,000 its maximum Foreign Tax Credit for the current year is A. $9,000 B. $45,000 C. $34,000 D. $136,000

C. $34,000

Mr. Pine purchased a small office building during the year. Included in his costs were the following: Cash down payment $50,000 Mortgage on property assumed $300,000 Title Insurance $2,000 Fire insurance premiums $2,000 Attorney fees $1,000 Rent to former owner to allow Mr. Pine to occupy the office building prior to closing $4,000 What is Mr. Pine's basis in the property? A. $359,000 B. $355,000 C. $353,000 D. $350,000

C. $353,000

Mr. and Mrs. Robinson are both over age 65 and file a joint return. During the current year, they received $4,000 in nontaxable benefits form Social Security. This was their only nontaxable income. Their adjusted gross income was $12,000. How much can they claim as tentative credit for the elderly? A. $0 B. $225 C. $375 D. $525

C. $375

An employee who has Social Security tax withheld in an amount greater than the maximum for a particular year may claim A. Such excess as either a credit or an itemized deduction, at the election of the employee, if that excess resulted from correct withholding by two or more employers. B. Reimbursement of such excess from his or her employers if that excess resulted from correct withholding by two or more employers. C. The excess as a credit against income tax, if that excess resulted from correct withholding by two or more employers. D. The excess as a credit against income tax, if that excess was withheld by one employer

C. The excess as a credit against income tax, if that excess resulted from correct withholding by two or more employers.

Emma's brother purchased 100 shares of Clockwork, Inc., stock for $10 per share on December 30, 2016. Emma inherited the shares of Clockwork stock from her brother on September 15, 2017, when it had a fair market value of $15 per share. On December 20, 2018, she sold the stock for $20 per share. What is the amount and character of her gain? A. The gain of $1,000 is short-term capital gain. B. The gain of $1,000 is long-term capital gain C. The gain of $500 is long-term capital gain D. The gain of $500 is short-term capital gain

C. The gain of $500 is long-term capital gain

Which of the following is earned income for Earned Income Credit purposes? A. Unemployment compensation B. Alimony C. The wages of a minister who has an exemption from self-employment tax. D. The wages of an inmate working in the prison laundry.

C. The wages of a minister who has an exemption from self-employment tax.

For 2018, Mike and Denise, calendar-year taxpayers, had gross income comprised of the following: Wages received as a farm employee $26,000 Gross income from Schedule F dairy operations $40,000 Distributable share of an S corporation's gross income from farming $12,000 Long-term capital gains from stock sales $18,000 Short-term capital losses from stock sales $(21,000) They have made no estimated tax payments as of December 31, 2018 and the withholding from wages is not sufficient to relieve them from the estimated tax penalty. Which of the following statements is true if they make an estimated tax payment by January 15, 2019? A. They will avoid the estimated tax penalty since they are qualified farmers. B. They will avoid the estimated tax penalty since all of their earned income is from farming activities. C. They will not avoid the estimated tax penalty since their farm income does not comprise two-thirds of their gross income. D. They can avoid the estimated tax penalty only by filing their return by March 1, 2019, and paying all the tax due.

C. They will not avoid the estimated tax penalty since their farm income does not comprise two-thirds of their gross income.

Ten years ago, Edwin Ryan bought 100 shares of a listed stock for $5,000. In June of the current year, when the stock's fair market value was $7,000, Edwin gave it to his sister, Lynn. No gift tax was paid. Lynn died in October of the same year, bequeathing the stock to Edwin, when the stock's fair market value was $9,000. Lynn's executor did not elect the alternate valuation date. What is Edwin's basis for this stock after he inherits it from Lynn's estate? A. $7,000 B. $9,000 C. $0 D. $5,000

D. $5,000

Mr. Hardwood has an adhusted gross income of $50,000. In 2018, he donated capital gain property valued at $25,000 to his church and did not choose to reduce the fair market value of the property by the mount that would have been long-term gain if he had sold it. His basis in the property was $20,000. In addition, he made the following contributions: $500 to upgrade the city public park $1,000 to the Hill City Chamber of Commerce $5,000 to a charitable organization in Germany Compute Mr. Hardwood's deduction for charitable contributions in the current year (without regard to any carryover or carryback amounts). A. $25,000 B. $31,500 C. $16,500 D. $15,500

D. $ 15,500

Mr. More inherited 2,000 shares of Corporation Zero stock from his father, who died on March 4, 2018. His father paid $10 per share for the stock on September 4, 1991. The fair market value of the stock on the date of death was $50 per share. On September 4, 2018, the fair market value of the stock was $60 per share. Mr. More sold the stock for $75 per share on July 3, 2018. The estate qualified for, and the executor elected, the alternate valuation date. An estate tax return was filed. What was Mr. More's basis in the stock on the date of the sale? A. $100,000 B. $120,000 C. $130,000 D. $150,000

D. $150,000

Jerry has two dependent children, Greg and Mandy, who are attending an accredited college in 2018. Greg, a fifth-year senior since January 1, spent $7,000 for tuition and fees. Mandy, a freshman with no prior post-secondary education, had tuition expenses of $4,000 Jerry meets all the income and filing status requirements for the education credits. There is no tax-free liability before credits equals $14,000. What is the maximum credit that Jerry may claim on his 2018 tax return? A. $2,200 Lifetime Learning Credit. B. $5,000 AOC C. $2,500 AOC and $1,000 Lifetime Learning Credit D. $2,500 AOC and $1,400 Lifetime Learning Credit

D. $2,500 AOC and $1,400 Lifetime Learning Credit

Mr. Pipe, a plumber, usually charges $20 per hour for his services. One of his customers gave him a painting in exchange for 6 hours of labor plus materials. The painting originally cost the customer $180 and had a current established fair market value of $220. There was no agreed-upon price before the work was done. What is the amount that Mr. Pipe must include in income and what is his basis in the painting? Income Basis A. $120 $220 B. $220 $180 C. $120 $180 D. $220 $220

D. $220 $220

During 2002, John purchased 50 shares of common stock in Corporation D for $4,500. In 2013, D declared a stock dividend of 20%. The new stock received by John in the stock dividend was identical to the old stock. In 2018, D's stock split 3-for-1 at a time when the fair market value was $120 per share. What is John's basis in each of his shares of D's stock if both distributions were nontaxable? A. $120 per share. B. $90 for shares and $0 for all additional shares. C. $75 for 60 shares and $142.50 for 120 shares D. $25 per share

D. $25 per share

Charles gave his daughter, Jane, a residential house. He had purchased the house for $250,000 in 2003. The fair market value on the date of the gift was $300,000. Charles had added a $25,000 roof the year before he gave it to Jane. Jane converts the house to a residential rental property within 1 year of the gift when the FMV was $320,000. Jane's basis in the property is A. $300,000 B. $250,000 C. $225,000 D. $275,000

D. $275,000

In 2018, Janice volunteered at her local art museum where she conducted art-education seminars. She was required to wear a blazer that the museu m provided, but she paid the dry cleaning costs of $200 for the year. The blazer was not suitable for everyday use. Her travel to and from the museum was 1,000 miles for the year. She estimates the value of the time she contributed during the year at $2,000 (200/hr x 100 hours). Her Schedule A deduction for charitable contributions is which of the following? A. $2,340 B. $2,140 C. $140 D. $340

D. $340

On January 3, 2018, Irene purchased 300 shares of common stock in Corporation Y for $120 per share. Four months later, she purchased 100 additional shares at $180 per share. On December 10, 2018, Irene received a 20% nontaxable stock dividend. The new and the old stock are identical. What is the amount of Irene's basis in each share of stock after the stock dividend? A. 480 shares at $112.50 per share B. 360 shares at $120 per share and 120 shares at $180 per share C. 360 shares at $120 per share and 120 shares at $150 per share D. 360 shares at $100 per share and 120 shares at $150 per share

D. 360 shares at $100 per share and 120 shares at $150 per share

In January of the current year, Mrs. Black purchased an office building and used office furnishings. The used office furnishings consisted of chairs, desks, and file cabinets. Of the purchase price, $900,000 was allocated to the office building and $50,000 was allocated to the used office furnishings. According to the General Depreciation System (GDS) under MACRS for depreciation, what recovery period must she use for the purchased items? A. 27 1/2 years for the entire asset, building and furnishings B. 39 years for the building and 5 years for the used office furnishings C. 27 1/2 years for the building and 7 years for the used office furnishings D. 39 years for the building and 7 years for the used office furnishings

D. 39 years for the building and 7 years for the used office furnishings

The acknowledgement an individual needs from any charitable organization to claim a deduction for any cash contribution of $250 or more in a single donation must include which of the following? A. The reason for the contribution B. The returned check showing the donation amount C. A description of past contributions and any plans for future contributions D. A contemporaneous written receipt

D. A contemporaneous written receipt

Which of the following is NOT a qualifying student for purposes of the Lifetime Learning Credit? A. A student in a graduate program. B. A part-time student (less than half-time) C. A student in a vocational program D. All are qualifying students for the Lifetime Learning Credit

D. All are qualifying students for the Lifetime Learning Credit

The Earned Income Credit (EIC) is available to A. Person with a qualifying child. B. Persons without a qualifying child C. Persons who are age 40 D. All of the answers are correct.

D. All of the answers are correct

Which of the following will decrease the basis of property? A. Depreciation B. Return of capital C. Recognized losses on involuntary conversions D. All of the answers are correct.

D. All of the answers are correct

You incurred the following expenditures in connection with your rental property. Which of them should be capitalized? A. New roof B. Install new cabinets C. Pave driveway D. All of the answers are correct

D. All of the answers are correct

Your basis in property you inherit from a decendent is generally one of the following: A. The FMV on the alternate valuation date, if the personal reprentative for the estate chooses to use alternate valuation. B. The decendent's adjusted basis in land to the extent of the value that is excluded from the decedent's taxable estate as a qualified conseevation easement. C. The FMV of the property at the date of the individuals death. D. All of the answers are correct.

D. All of the answers are correct

Alternative minimum tax for individuals requires certain adjustments and preferences. Which of the following is a preference or adjustment item for noncorporate taxpayers? A. Standard deduction B. Incentive stock options C. Tax-exempt interest on certain private activity bonds (not issued in 2009 or 2010) D. All of the answers are correct.

D. All of the answers are correct.

All of the following individuals file their income tax returns as single. Which one is required to make estimated tax payments for 2018? A. Ms. Kirkland, who had no tax liability for 2017, expects to owe $2,500 self-employment tax for 2018 (she has no withholding tax or credits) B. Mr. Brady, who had a $2,000 tax liability for 2017, expects a $2,100 tax liability for 2018 and withholding of $1,900 C. Ms. Evans, who had no tax liability for 2017, expects a tax liability of $4,900 for 2018, with $3,500. D. Mr. Jones, who had a 2017 tax liability of $9,500, expects a tax liability of $12,400 for 2018, with $8,500 withholding.

D. Mr. Jones, who had a 2017 tax liability of $9,500, expects a tax liability of $12,400 for 2018, with $8,500 withholding.

In 2016, Paul received a boat as a gift from his father. At the time of the gift the boat had a fair market value of $60,000 to Paul's father. After Paul received the boat, nothing occurred affecting Paul's basis in the boat. In 2018, Paul sold the boat for $75,000. What is the amount and character of Paul's gain? A. Ordinary income of $15,000 B. Long-term capital gain of $15,000 C. Long-term capital loss of $5,000 D. Neither a gain nor a loss

D. Neither a gain nor a loss

Which of the following statements is NOT true regarding tax benefits for education? A. The AOC may be claimed for tuition expenses incurred in the first 4 years of post-secondary education. B. The dollar limitations for the AOC are calculated on a per-student basis. C. The Lifetime Learning Credit is allowed for tuition paid for graduate program studies. D. Room and board are qualifying expenses for the AOC.

D. Room and board are qualifying expenses for the AOC.

The basis in property inherited from a decedent may be determined as follows: A. The decedent's basis plus any inheritance tax paid on the increased value. B. The fair market value at the date of death. C. The fair market value at an alternate valuation date. D. The fair market value at the date of death or the fair market value at an alternative valuation date.

D. The fair market value at the date of death or the fair market value at an alternative date.