Wednesday, June 29, 2011

I got 37/40

1. c
2. d
3. d
4. e
5. a
6. d
7. a
8. e
9. c
10. d
11. b
12. a
13. d
14. c
15. b
16. a
17. e
18. c
19. d
20. a
21. c
22. c
23. e
24. d
25. b
26. d
27. d
28. c
29. b
30. d
31. c
32. b
33. e
34. a
35. b
36. e
37. e
38. b
39. c
40. c
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Tuesday, June 28, 2011

38/40 on Mid-term

Here is what I submitted. Got 38 out of 40. Thanks to everyone for their input, it was very helpful.
1. c
2. d
3. d
4. e
5. a
6. d
7. a
8. e
9. c
10. d
11. b
12. a
13. d
14. c
15. e
16. a
17. e
18. c
19. d
20. a
21. c
22. c
23. e
24. d
25. b
26. d
27. d
28. c
29. b
30. d
31. c
32. b
33. e
34. a
35. b
36. e
37. c
38. b
39. d
40. c
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Monday, June 27, 2011

my mid-term 36/40 correct


  1. C

  2. D

  3. D

  4. E

  5. A

  6. D

  7. A

  8. E

  9. C

  10. D

  11. B

  12. A

  13. D

  14. C

  15. B

  16. A

  17. E

  18. C

  19. D

  20. A

  21. C

  22. C

  23. E

  24. D

  25. B

  26. D

  27. D

  28. C

  29. B

  30. D

  31. E

  32. B

  33. E

  34. A

  35. B

  36. E

  37. E

  38. B

  39. C

  40. C

Just submitted my answers and I missed 4 questions. Which ones did i miss?

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Thursday, June 23, 2011

First Attempt at Mid Term

So I am not good with the form 1040... and I don't have time to write all of these out...but if you disagree with an answer put your work in next to what you think it is. I have not submitted these yet...good luck
1. C
2. No Clue
3. No Clue
4. E
5. E
6. D
7. C
8. E
9. D
10. D
11. B
12. A
13. D
14. C
15. B
16. A
17. E
18. C
19. D
20. A
21. C
22. C
23. E
24. D
25. B
26. E
27. D
28. C
29. B
30. D
31. E
32. B
33. E
34. A
35. B
36. E
37. E
38. B
39. C
40. C
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Thursday, June 16, 2011

Trevor:

here are my differences:

4. e
9. d recapture is depreciation
12. d
13. e
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Monday, June 13, 2011

Answers to Quiz 2

I have not submitted these, but here are my answers and work for Quiz #2:
1. A (You can not amortize insurance)
2. E (They are all intangible assets but only the leasehold improvement is subject to amortization, you can also get this if you think that a is correct for question 1)
3. D (Inventory can not be considering section 1231)
4. C (The section 1231 loss is $4,800 but we have no way of knowing the net capital loss as we were only given the numbers for Section 1231)
5. E (There is nothing to recapture as the sale resulted in a loss)
6. B (Your primary residence is not considered "income producing")
7. A (You must capitalize not deduct the replacement of a roof)
8. B (Buy cost=130k + new roof 6k - depreciation 8k= 128k, we don't use the 4k from repairs because they don't affect the basis in the property)
9. A (Not sure on this one but my thinking is that since he purchased the home after 1986 then he had to use straight line depreciation and therefore there would no acceleration of depreciation and thus no recapture would ever occur no matter when he sold.)
10. ? ( I don't think the right answer is on this quiz as tax law allows a section 179 deduction of up to 250k in 2009 and they passed the income test as well so they should be able to deduct the full amount of 171k...let me know what you guys come up with as I am probably approaching this wrong)
11. C
12. A
13. B
Here are my calculations, again please check these as I have not submitted this yet to check.
Step 1: Stu is getting 250k building and assuming (net) 50k in mortgage debt for a total of 200k
Stu is giving a building in which his basis is 75k
Therefore his realized gain is 125k
Step 2: He received negative boot so the lesser of boot and realized gain is 0=recognized gain
Step 3: Gain realized 125k - gain recognized 0k= 125k=Gain realized but not recognized
Step 4: FMV of property recieved = 250k - gain realized not recognized 125k = new basis 125k
14. D (I think this one is tricky because like kind still applies to improved vs unimproved property, my inclination was to choose E, but taking on a mortgage could trigger the boot clause which would then be considered a taxable event if she got net debt relief..)
15. B (It has to be A or B as June obviously qualifies so their capital gain has to be 50k or below (300k-250k) so we just need to check for any special rules regarding divorce, as their are none that I could find the correct answer must be B 50k)
16. B (Profit of 12k profit margin of 12k/32k= 37.5% First year's payments Feb 1 $4k, Dec 1 $7k total of $11k multiply that by the profit margin to get $4,125)
17. B ( This was straight out of the slides, but here it is anyway... Profit of 30k, profit margin = 30k/45k=66.6667% First year's payments =15%*45,000=$6750, $6750*66.6667%=$4,500
18. D
19. B
20. A
(The problem looks like this: Step 1: 75k (Received)- 40k (Basis)= 35k =realized gain, Step 2: 75k (received)-70k (replacement property cost)=5k=recognized gain, Step 3: 35k (realized)-5k (recognized)=30k postponed, Step 4: 70k (replacement cost)-30k (gain postponed)=40k (basis of replacement property)

Again as a reminder...I have no idea if these are correct this just represents my works thus far.  Please offer up all other solutions otherwise we won't come up with the right answers.  Thanks much guys look forward to your work!
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Friday, June 10, 2011

Quiz 2

 
 
 


Question 1

  1.  
    1. All of the following expenditures generally have a life that is longer than a year and must be capitalized to spread the cost over specified periods EXCEPT:
1 points  

Question 2

  1.  
    2.      Which of the following intangible properties is subject to amortization?


1 points  

Question 3

  1.  
    3.      All of the following assets are Sec. 1231 property, EXCEPT:


1 points  

Question 4

  1.  
    4.      Duke Moxley, a local businessman, completed a number of property sales of both Sec. 1245 and Sec. 1250 property.  Specifically, he had Sec. 1231 losses of $3,000, $7,000, and $9,000, and Sec 1231 gains of $8,000 and $6,200.  All of the following statements are correct EXCEPT:

1 points  

Question 5

  1.  
    5.      Peter Prentiss owns and operates a small printing shop and purchased a small press for his business several years ago at a cost of $8,000.  Last year, Peter sold the press for $3,000 and had claimed depreciation of $4,000.  Which of the following amounts must Peter recapture as ordinary income?


1 points  

Question 6

  1.  
    6.      The term "income-producing property” includes all of the following EXCEPT:



1 points  

Question 7

  1.  
    7.      All of the following are examples of currently deductible business expenses for federal income tax purposes EXCEPT:



1 points  

Question 8

  1.  
    8.   Harry Hanover bought a small rental apartment house in 2002 for $130,000.  Since then, he has had to put on a new roof at a cost of $6,000.  Apart from this, maintenance on the property has required the expenditure of $4,000.  Depreciation claimed on the property since its purchase is $8,000.  Which of the following is Harry’s current adjusted basis in the property?



1 points  

Question 9

  1.  
    9.      Assuming Harry sells the property in Question 8 above, for a net return of $140,000, how much Section 1250 recapture would he have?



1 points  

Question 10

  1.  
    10.  Superstar Corporation buys computer equipment in 2009 for $171,000.  The corporation’s taxable income before depreciation is $500,000.  What is the maximum amount of cost recovery on this equipment that Superstar can deduct in 2009?



1 points  

Question 11

  1.  
    Use the following information to answer items 11 through 13


    Stuart Petrie wants to exchange his fully-rented duplex for Harry Niece’s apartment building.  The duplex has a fair market value of $200,000, an adjusted basis of $75,000, and an existing mortgage of $80,000.  Harry’s building has a fair market value of $250,000, an adjusted basis of $120,000, and an existing mortgage of $130,000.  They are willing to make the trade and are willing to assume each other’s mortgages.


    11.  Which of the following amounts is the gain realized by Stuart in this exchange?


1 points  

Question 12

  1.  
    12.  Which of the following amounts is the gain recognized by Stuart in this exchange


1 points  

Question 13

  1.  
    13.  Which of the following amounts is the substituted basis for the apartment building, assuming Stuart makes this trade?


1 points  

Question 14

  1.  
    14.  Sharon Hyson owns a rental duplex in New York.  She wants to trade with Karen Beech.  Which of the following assets could Sharon accept from Karen to qualify the transaction for like-kind treatment?


1 points  

Question 15

  1.  
    15.  June Harper bought a home with her husband in 1983 for $200,000.  They were divorced in 1995, and Jane became sole owner of the home under the divorce decree.  In October last year, she married Roger Noonan.  Roger and June have been living in the house since the marriage, but they were planning now to move to Florida and are thinking about selling June’s house.  The house has a fair market value of $500,000.  What will Roger and June have to report as taxable capital gain if they sell in December of this year?


1 points  

Question 16

  1.  
    16.  Thomas Wingate sold an antique automobile to a buyer for $32,000.  Thomas acquired the automobile for his collection a few years ago for $20,000.  Thomas received $4,000 in cash at the time of sale and will receive an annual payment of $7,000 over 4 years (payments are to be made on December 1 of each year).  The sale occurred on February 1 of this year.  Which of the following amounts is the gain Thomas must recognize for the current year?


1 points  

Question 17

  1.  
    17.  Claire Stein sold a parcel of raw land to Denise Keller for $45,000.  Claire purchased the land five years ago for $15,000.  Denise agreed to pay 15% in cash this year (year of sale) and agreed to pay $12,750 in each of the next three years on an installment note.  Which of the following amounts is the gain Claire must recognize for the current year?


1 points  

Question 18

  1.  
    18.  George owned a small rental property, which was condemned by the county to enable the extension of a school playground.  His adjusted basis in the property was $40,000, and he received a payment of $75,000 from the county.  A year later he purchased a similar piece of real estate for $70,000.  Which of the following amounts is his realized gain?


1 points  

Question 19

  1.  
    19.  Using information from Question 18 above, which of the following amounts is George’s recognized gain on the involuntary conversion of the rental property?


1 points  

Question 20

  1.  
    20.  Using the information in Questions 18 and 19, which of the following amounts is George’s basis in the replacement property?


1 points  

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