DEVRY ACCT 553 Final Exam

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2. (TCO E) Distinguish between realized gains and losses and recognized gains and losses.(Points : 17) 3. (TCO F) Describe the current tax law for sale of residence.(Points : 17) 4. (TCO G) Briefly describe what “material participation” is. Why is the determination of whether a taxpayer materially participates important?(Points : 17) 5. (TCO I) Amos, a single individual with a salary of $50,000, incurred and paid the following expenses during the year. Medical expenses: $5,000 Alimony: $14,000 Casualty loss (after $100 floor): $1,000 State income taxes: $4,000 Moving expenses: $1,500 Contribution to a traditional IRA: $2,000 Student loan interest: $1,200 Analyze the above expenses and determine which ones are deductible for AGI. Please support your position.(Points : 17) 6. (TCO I) A review of Bearing’s Year 2 records disclosed the following tax information: Wages $ 20,000 Taxable interest and qualifying dividends 4,000 Schedule C trucking business net income 32,000 Rental (loss) from residential property (35,000) Limited partnership (loss) (5,000) Bearing actively participated in the rental property and was a limited partner in the partnership. Bearing had sufficient amounts at risk for the rental property and the partnership. What is Bearing’s Year 2 adjusted gross income? 7. (TCO F) (Becker CPA Review Course, Reg. 1) Smith has an adjusted gross income (AGI) of $140,000 without taking into consideration $40,000 of losses from rental real estate activities. Smith actively participates in the rental real estate activities. What amount of the rental losses may Smith deduct in determining taxable income?(Points : 17) 8. (TCO B) (Becker CPA Review Course Reg. 3) For the year ended December 31, Year 6, Taylor Corp. had a net operating loss of $200,000. Taxable income for the earlier years of corporate existence, computed without reference to the net operating loss, was as follows: Taxable Income: Year 1 $ 5,000 Year 2 10,000 Year 3 20,000 Year 4 50,000 Year 5 50,000 What amount of net operating loss will be available to Taylor for the year ended December 31, Year 7?(Points : 17)
9. (TCO F) (Becker CPA Review <strong>Exam</strong> Reg. 1) Randolph is a single individual who always claims the standard deduction. Randolph received the following in the current year: Wages $ 22,000 Unemployment compensation 6,000 Pension distribution (100% taxable) 4,000 A state tax refund from the previous year 425 What is Randolph’s gross income?(Points : 17) 10. (TCO H) Alex Smith purchased 30 shares of XYZ stock on April 30, 2010 for $210, and on September 1, 2010, he purchased 90 additional shares for $900. On November 8, 2010, he sold 48 shares, which could not be specifically identified, for $528, and on December 15, 2010, he sold another 25 shares for $50. What is his recognized gain or loss?(P
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DEVRY ACCT 553 Final Exam

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