Tax quiz 7

| July 29, 2018

Your quiz has been submitted successfully.

Ch. 7 TF
Question 1 0
/ 1 point
Taxpayer’s home was destroyed by a storm in the current year
and the area was declared a disaster area. If the taxpayer elects to treat the
loss as having occurred in the prior year, it will be subject to the 10%-of-AGI
reduction based on the AGI of the current year.

In True
Correct Answer False
View Feedback
Question 2 1
/ 1 point
A corporation which makes a loan to a shareholder can have a
nonbusiness bad debt deduction.

True
False
View Feedback
Question 3 1
/ 1 point
If a taxpayer sells their § 1244 stock at a loss, all of the
loss will be ordinary loss.

True
False
View Feedback
Question 4 1
/ 1 point
If the amount of the insurance recovery for a theft of
business property is greater than the asset’s fair market value but less than
it’s adjusted basis, a gain is recognized.

True
False
View Feedback
Question 5 1
/ 1 point
Several years ago, John purchased 2,000 shares of Red
Corporation § 1244 stock from Mark for $40,000. Last year, John sold one-half
of his Red Corporation stock to Mike for $12,000. During the current year, John
sold the remaining Red Corporation stock for $3,000. John has a $17,000 ($3,000
– $20,000) ordinary loss for the current year.

True
False
View Feedback
Ch. 7 MC
Question 6 1
/ 1 point
In 2013, Sarah (who files as single) had silverware worth
$10,000 (basis $6,000) stolen from her home. Sarah’s insurance company told her
that her policy did not cover the theft. Sarah’s other itemized deductions last
year were $2,000. She had AGI of $30,000 last year. In August of 2014, Sarah’s
insurance company decided that Sarah’s policy did cover the theft of the
silverware and they paid Sarah $5,000. Determine the tax treatment of the
$5,000 received by Sarah during 2014.

None of the $5,000 should be included in gross income.

$2,900 should be included in gross income.

$5,000 should be included in gross income.

Last year’s return should be amended to include the $5,000.

None of the above.

View Feedback
Question 7 1
/ 1 point
Jed is an electrician. Jed and his wife are accrual basis
taxpayers and file a joint return. Jed wired a new house for Alison and billed
her $15,000. Alison paid Jed $10,000 and refused to pay the remainder of the
bill, claiming the fee to be exorbitant. Jed took Alison to Small Claims Court
for the unpaid amount and was awarded a $2,000 judgement. Jed was able to
collect the judgement but not the remainder of the bill from Alison. What
amount of loss may Jed deduct in the current year?

$0.

$2,000.

$3,000.

$5,000.

None of the above.

View Feedback
Question 8 1
/ 1 point
John files a return as a single taxpayer. In 2014, he had
the following items:

? Salary
of $40,000.
? Loss of
$65,000 on the sale of § 1244 stock acquired two years ago.
? Interest
income of $6,000.
Determine John’s AGI for 2014.

($5,000).

$0.

$45,000.

$51,000.

None of the above.

View Feedback
Question 9 1
/ 1 point
On June 2, 2013, Fred’s TV Sales sold Mark a large HD TV, on
account, for $12,000. Fred’s TV Sales uses the accrual method. In 2014, when
the balance on the account was $8,000, Mark filed for bankruptcy. Fred was
notified that he could not expect to receive any of the amount owed to him. In
2015, final settlement was made and Fred received $1,000. How much bad debt
loss can Fred deduct in 2015?

$0.

$7,000.

$8,000.

$12,000.

None of the above.

View Feedback
Question 10 1
/ 1 point
In 2014, Theo, an employee, had a salary of $30,000 and
experienced the following losses:

Loss from damage to rental property
($10,000)

Unreimbursed loss from theft of business computer
(5,000)

Personal casualty gain
4,000

Personal casualty loss (after $100 floor)
(9,000)

Determine the amount of Theo’s itemized deduction from these
losses.

$0.

$2,800.

$2,900.

$4,580.

None of the above.

Get a 30 % discount on an order above $ 100
Use the following coupon code:
ESSAY30
Positive SSL