Tax final
the greater of cost depletion or percentage depletion must be used
in calculating depletion of natural resources each period
either added or subtracted
in computing AMTI, adjustments are
home mortgage interest (on mortgage in effect since home was purchased)
in computing AMTI, all of the following must be added back except
added only
in computing AMTI, tax preference items are
only offset a taxpayer's tax liability in the current year
nonrefundable tax credits
the installment sale method
when accounting for long-term contracts (other than those for services) all of the following accounting methods may be acceptable with the exception of
6
when depreciating 5-year property, the final year of depreciation will be year
a machine used in the company's manufacturing operations
which of the following assets is 1231 property
US treasury bonds
which of the following bonds do no generate tax-exempt federal income?
a company producing parts for the auto industry-costs in this field tend to steadily climb
which of the following businesses is most likely to benefit from an election to account for its inventory under LIFO
a home construction company averaging $30 million in gross revenues each year
which of the following companies whose business involves long-term contracts will be eligible to use the completed contract method
fair market value of prize won on a game show
which of the following is not excluded from income
a CPA firm with average revenues of $30 million
which of the following partnerships can use the cash method of accounting
a taxpayer must replace the destroyed property within the same year in which the gain is realized
which of the following statements is false regarding involuntary conversions
the taxpayer must be occupying the residence at the time of the sale in order for SEC 121 to apply
which of the following statements is false with regard to the ownership and use tests under Sec 121
amounts of the Sec 179 election in excess of the taxable income limitation are carried forward
which of the following statements regarding Sec 179 is true?
UNICAP requires that advertising and selling costs be allocated between inventory and cost of sales
which of the following statements regarding UNICAP is incorrect
year-end bonus check
Amy's employer provides her with several fringe benefits. which of the following are included in her taxable income
a net capital gain of $40,000 taxed at 15%
Blair, whose tax rate is 24% sells one tract of land at a gain of $29,000 and another tract of land at a gain of $11,000; both tracts of land are Sec.1231 property. she has never had any other Sec 1231 transactions. how are the gains taxed?
identified within 45 days and received within 180 days
Ella needs to move her business to a larger facility...
alternative minimum tax base
Harley's tentative minimum tax is computed by multiplying the AMT tax rates by her
Mingming will prefer the deduction, but Xavier will prefer the credit
Mingming and Xavier unrelated single taxpayers, have each incurred a $1000 expenditure. Before considering this expenditure, Mingming has taxable income...
The 1231 gains and losses are treated as ordinary gains and losses making Pierce's AGI for the year $46,000
Pierce has a $16,000 Sec 1231 loss, a $12,000 Sec 1231 gain, and a salary of $50,000. what is the treatment of these items in Pierce's AGI
the 1231 gains and losses are treated as ordinary gains and losses making Pierce's AGI for the year $46,000
Pierce has a $16,000 Sec 1231 loss, a $12,000 Sec 1231 gain, and a salary of $50,000. what is the treatment of these items in Pierce's AGI.
held for sale to customers
Sec 1231 property will generally have all the following characteristics except
social security and Medicare hospital insurance
Self-employment taxes include components for
A sale of property and subsequent purchase of like-kind property will always qualify as a like-kind exchange
Which of the following statements with respect to a like-kind exchange is false?
higher for tax reporting purposes than for financial reporting purposes
a business uses the same inventory method for both financial reporting and tax reporting. because of the UNICAP requirement, ending inventory is likely to be
a garage for the service vans
a client placed three new businesses assets into service in 2020. the client has high taxable income and would like to maximize the deduction by using bonus depreciation, all of the following assets will qualify for bonus depreciation except
a C corporation (not a personal service corporation) tax year ending on February 15
a new business is established. it is not a seasonal business. all of the following are acceptable accounting tax years with the exception of
office building
a purchaser of the assets of a business must allocate the purchase price to the individual assets in accordance with the written agreement between the purchaser and the seller. which of the following assets would be least preferred for purposes of allocating value from the purchaser point of view
Medicare
a wage cap does not exist for which of the following self-employment taxes
at least two years of the five-year period before the sale date
according to SEC 121 individuals who sell or exchange their personal residence may exclude part of all of the gain if the house was owned and occupied as a principal residence for
Dec 31, 2023
alex owns an office building which the state condemns on Jan 15, 2020; alex receives the condemnation award on April 1, 2020. in order to qualify for nonrecognition of gain on this involuntary conversion, what is the last date for alex to acquire qualified replacement property
state income taxes
all of the following are allowable deductions under the alternative minimum tax except
dividends received by a corporate shareholder
all of the following are self-employment income except
a non-simultaneous exchange may never qualify as a like-kind exchange
all of the following are true except
expected lower tax rates in the future
all of the following conditions would encourage a taxpayer to avoid like- kind exchange treatment on the disposition of an otherwise qualifying asset except
a printer used in trade or business for a computer used in trade or business
all of the following qualify as a like-kind exchange except
employees who have a business in addition to their regular employment are not subject to the self-employment tax since FICA is withheld on their wages
all of the following statements regarding self-employment income/tax are true except
any disposition of property where at least one payment is received after the close of the taxable year in which disposition occurs
an installment sale is best defined as
any disposition of property where at least one payment is received after the close of the taxable year is which disposition occurs
an installment sale is best defined as
management studies
costs that qualify as research and experimental expenditures include all of the following except
in the long run, the amount of income reported by a taxpayer will generally be the same regardless of the accounting methods used by the taxpayer. in a given year the amount of income reported by a taxpayer can vary significantly depending on the accounting method used by the taxpayer
do accounting rules determine the amount of income to be reported by a taxpayer
$12,000 net LTCG
during the current year, George recognizes a $30,000 Sec 1231 gain on sale of land and a $18,000 Sec. 1231 loss on the sale of land. Prior to this, George's only Sec. 1231 item was a $14,000 loss six years ago. George must report a
inventory purchased 24 months ago
for a business, Sec. 1231 property does not include
the property or services are actually provided
for purposes of the accrual method of accounting, the economic performances test is met when
straight-line method and a mid-month convention in the year of acquisition and in the year of disposition
for real property placed in service afer 1986, depreciation under the MACRS system is calculated using the
incurred in gambling activities
generally deductions for adjusted gross income on an individuals tax return include all the following types of expenses except those
two years
generally, a full exclusion of gain under Sec 121 upon the sale of a personal residence applies to only one sale or exchange every
the accounting methods used by a taxpayer can accelerate or deter the recognition of income, and thereby, change when the tax must be paid. also because of the progressive tax rate structure, taxes can be saved by spreading income over several years, rather than having income bunched into one year, pushing the taxpayer into higher brackets
how does a taxpayer's tax accounting method affect the amount of tax paid
110%
if a taxpayers AGI is greater than 150,000, no penalty will be imposed if the taxpayer pays estimated tax payments in 2018 equal to what percentage of 2017's income tax liability
a for AGI deduction
if an individual is liable for self-employment tax, a portion of the self-employment tax is
alternative depreciation system
if the business usage of listed property is less than or equal to 50% of its total usage, depreciation is calculated using the
2 years
if there is a like-kind exchange of property between related parties, how long do they have to wait to dispose of the property received in order to avoid having to recognize any gain on the exchange
allow the excess over the taxpayer's tax liability to be paid to the taxpayer
refundable tax credits
Social Security and Medicare hospital insurance
self-employment taxes include components for
AGI reduced by the greater of the standard deduction or itemized deductions
taxable income for an individual is defined as
units-of-production method
the client is a corporation which uses high-tech equipment to manufacture its product. because of the high level of wear and tear due to long production runs and frequent technology changes, the client usually replaces the equipment every two years; according to IRS guidance, the MACRS life of the equipment is five years. in order to accelerate depreciation deductions, which tax depreciation option should the client elect?
foreign tax credit
the general business credit includes all of the following with the exception of
marketable securities
the installment method may be used for sales of all kinds of property with the exception of
individual income taxes
the largest source of revenues for the federal government comes from
calculation of interest on additional tax that would have been due if actual cost rather than estimated cost had been used on the percentage of completion method
the look-back interest adjustment involves the
fixed assets are always expensed as the taxpayer pays for the assets
under the cash method of accounting, all of the following are true with the exception of
based on the portion of work that has been completed
under the percentage of completion method, gross income is reported
all of the above
under what circumstances might a taxpayer elect the alternative depreciation system for a new equipment acquired this year
a sale of property and subsequent purchase of like- kind property will ways qualify as a like- kind exchange
which of the following statements with respect to a like - kind exchange is false
earned income credit
which one of the following is a refundable credit
tax credits reduce tax liability on a dollar-for-dollar basis
which statement is correct
all of the above
why did congress establish favorable treatment for 1231 assets?
no underpayment penalty is imposed if the estimated payments total at least 90% of the actual tax liability for the prior year
with respect to estimated tax payments for a taxpayer with AGI of $150,000 or lower in the prior year, all of the following are generally true with the exception of
80% or more of the gross rental income from the building or structure must be rental income from dwelling units in order for it to be classified as residential rental property
with respect to residential rental property