Question

QUESTION 6

What is the tax treatment for rents received for a home rented out for less than 14 days?

	a.	Taxed at ordinary rates
	b.	Tax Exempt
	c.	Taxed at Capital Gains Rates
	d.	Tax at the property tax rates for the locality.

5 points   

QUESTION 7

Assume you have a taxpayer, who wants to sell their home and they have heard they don’t have to pay any tax on the sale. You tell her there are conditions to gain exclusion. Which of the following are requirements for the §121 gain exclusion? (Choose only one, best answer)

	a.	An ownership test of 5 out of the last 8 years and use test of 2 of the last 5 years.
	b.	An ownership and use test of 5 out of the last 8 years.
	c.	A use test of 5 out of the last 8 years and ownership test of 2 of the last 5 years.
	d.	An ownership and use test of 2 out of the last 5 years.

QUESTION 9

Assume your client Peace and Love, Inc. has purchased the following assets listed below, when they moved into their new office space in 2020. The office building was purchased in 2017 and placed into service on Dec 31, 2017. Also assume they have taxable income of $350,000 for the year and charitable deductions of $50,000 (This client files a 1040 Tax Return).

Asset	Purchase Date	Cost
Furniture – 7 Year	Nov 20	$180,000
Office Equipment – 7 Year	Apr 1	30,000
Construction Truck – 5 Year	May 30	80,000
Office Leasehold Improvements – 39 Year	Jan 15	500,000
Total		$790,000

Assume the income listed above and deductions are all from the taxpayers only business activity. What is the maximum §179 Deduction allowed by the client in 2020?

		210,000
		790,000
		290,000
		300,000

5 points   

QUESTION 10

Assume your client Peace and Love, Inc. has purchased the following assets listed below, when they moved into their new office space in 2020. The office building was purchased in 2017 and placed into service on Dec 31, 2017. Also assume they have taxable income of $350,000 for the year and charitable deductions of $50,000 (This client files a 1040 Tax Return).

Asset	Purchase Date	Cost
Furniture – 7 Year	Nov 20	$180,000
Office Equipment – 7 Year	Apr 1	30,000
Construction Truck – 5 Year	May 30	80,000
Office Leasehold Improvements – 39 Year	Jan 15	500,000
Total		$790,000

What convention will be used for the property placed into service in 2020?

	a.	MQ
	b.	MM
	c.	HY
	d.	MY

Answer 1