Question

(1) All of the following losses are deductible except

a) decline in value of securities

b) total worthlessness of securities.

c) sale of business property.

d) destruction of personal use property by fire, storm, or casualty.

(2) In 2011, Michael purchased land for $100,000. Over the years, economic conditions deteriorated, and the value of the land declined to $60,000. Michael sells the property in this year, when it is subject to a $30,000 nonrecourse mortgage. The buyer pays Michael $34,000 cash and takes the property subject to the mortgage. Michael incurs $5,000 in real estate commissions. Michael 's gain or loss on the sale is

A) $4,000 gain.

B) $1,000 loss.

C) $36,000 loss.

D) $41,000 loss.

(3)Ethan’s financial records for 2019 consist of interest income on corporate bonds of $11,000, taxable annuity receipts of $500, and investment interest expense of $13,500. Ethan’s investment interest expense deduction is

A) $0.

B) $11,000.

C) $11,500.

D) $13,500.

(4) Fran, who is self-employed, drove her automobile a total of 40,000 business miles in 2019. She also has receipts for business-related use as follows:

Parking                                  $500

Fuel                                         900

Tolls                                        200

Fran has an AGI for the year of $50,000. If Fran uses the standard mileage rate of 54.5 cents, she can deduct

A) $23,200.

B) $23,400.

C) $23,900.

D) $24,100.

(5) Caleb's medical expenses before reimbursement for 2019 include the following:

Medical premiums                   $12,000

Doctors, hospitals                      10,500

Prescription drugs                        1,800

Caleb's AGI for the year is $100,000. Caleb also receives a reimbursement for medical expenses of $4,000. Caleb's deductible medical expenses that will be added to the other itemized deductions will be

A $10,300.

B) $12,800.

C) $20,300.

D) $24,300.

(6) Which of the following is deductible as interest expense?

A) personal credit card interest.

B) interest to purchase tax-exempt bonds.

C) bank service charges on personal account.

D) none of the above.

(7) In computing AMTI, tax preference items are

A) excluded.

B) added only.

C) subtracted only.

D) either added or subtracted.

(8) For an NOL generated in 2019, the 1017 tax act provided that a taxpayer may

A) carry it back 2 years and forward 20 years.

B) carry it back 2 years and forward indefinitely.

C) carry it forward indefinitely.

D) can no longer carry it back or forward.

(9) Dennis exchanges business equipment with a $60,000 adjusted basis for $20,000 cash and business equipment with a $70,000 FMV. What is the amount of gain recognized on the exchange?

A) $0

B) $10,000

C) $20,000

D) $30,000

(10) Which of the following assets is 1231 property?

A) a machine used in the company's manufacturing operations.

B) an investment in corporate stock.

C) copyrights.

D) items held for resale by a retailer.

Answer 1

Note: As per answering rules only one question is answered, but i have answered four of them. If you want solution of other questions, please upload them separately. Feedback would be appreciated.