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Study Resources (Accounting)

61) Which of the following factors is important in distinguishing between capital and revenue expenditures? A) The expenditure improves the property, adding to the value of the property. B) The expenditure provides a betterment, adding to the value of the property. C) The expenditure restores the property. D) All of the above. 62) During 2013.
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94) Explain under what circumstances meals and lodging en route to a medical facility may be deductible. 95) Explain when the cost of living in an institution other than a hospital may be deductible. 96) Discuss the timing of the allowable medical expense deduction. 97) Patrick and Belinda have a twelve year old.
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21) Self-employed individuals may deduct the full self-employment taxes paid as a for AGI deduction. 22) Finance charges on personal credit cards are considered interest and are, therefore, deductible. 23) In general, the deductibility of interest depends on the purpose for which the indebtedness is incurred. 24) Interest expense incurred in the.
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41) The term "principal place of business" includes a home office used by a taxpayer for administrative or management activities of the business if no fixed location exists where the taxpayer conducts these activities. 42) Generally, deductions for adjusted gross income on an individual's tax return include all the following types.
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41) A net operating loss can be carried back three years or carried forward five years. 42) All of the following losses are deductible except A) decline in value of securities. B) total worthlessness of securities. C) sale or exchange of business property. D) destruction of personal use property by fire, storm, or casualty. 43) The.
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1) For individuals, all deductible expenses must be classified as deductions for AGI or deductions from AGI. 2) In 2013, medical expenses are deductible as a from AGI deduction to the extent that they exceed 7.5 percent of the taxpayer's AGI. 3) Medical expenses paid on behalf of an individual who could.
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103) During the current year, Donna, a single taxpayer, reports the following items income of income and expenses: Income: Salary$86,000 Municipal bond interest1,300 Bank account interest2,300 Alimony received24,000 Capital gain on an asset held less than one year3,000 Rental income from residential rental house12,500 Expenses/losses: Interest on principal residence8,000 Real estate taxes on principal residence              1,000 Capital loss on an asset.
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108) Lindsey Forbes, a detective who is single, operates a small pottery activity in her spare time. This year she reported the following income and expenses from this activity: Revenue from sale of pottery$ 9,000 Depreciation on potter's wheel( 3,000) Property taxes on shed where she does pottery( 1,200) Supplies used such as clay,.
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1) Expenses are deductible only if connected to trade or business or property held for the production of income. 2) A deduction will be allowed for an expenditure unless the Internal Revenue Code specifically disallows it. 3) Itemized deductions are deductions for AGI. 4) According to the tax formula, individuals can deduct the.
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118) Chen had the following capital asset transactions during 2013: Date acquiredDate soldBasisSales Price Sydney stock 2/5/20073/2/2013$ 5,000$  7,000 Lawrence stock 4/2/20045/1/2013 10,000  14,500 Collectibles 9/1/20089/1/2013      300    1,000 Autumn stock 1/2/20138/1/2013   6,700    5,500 What is the adjusted net capital gain or loss and the related tax due to the above transactions, assuming Chen has a 25%.
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95) Determine the net deductible casualty loss on the Schedule A for Alan Michael when his adjusted gross income was $40,000 in 2013 and the following occurred:  Adj. FMV  FMVInsurance AssetBasisBeforeAfterReimbursement A$1,200$2,000$ 500$ 100 B14,00012,0005,0001,100 C6003,0002,775125 A and B were destroyed in the same casualty in March. C was destroyed in a separate casualty in.
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21) Material participation by a taxpayer in a passive activity is satisfied if the individual participates in the activity for more than 500 hours during the year. 22) For purposes of the application of the passive loss limitations, a closely-held C corporation is a C corporation where more than 50 percent.
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91) Bart operates a sole proprietorship for which he uses the accrual method of accounting. Bart's sister Samantha, a cash method taxpayer, did some advertising work for Bart's business in November 2013. In December, Bart received a billing statement from Samantha for $5,000. Bart paid Samantha the $5,000 in January.
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31) A taxpayer is allowed to deduct interest expense incurred on home equity indebtedness limited to the lesser of $100,000 or the home equity (FMV of the residence less the acquisition indebtedness). 32) While points paid to purchase a residence are deductible as interest in the period paid, points associated with.
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31) When personal-use property is covered by insurance, no deduction is available for a casualty loss of the property unless the taxpayer timely files an insurance claim for the loss. 32) When the taxpayer anticipates a full recovery on a casualty loss of personal-use property but receives less than full recovery.
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81) In October 2013, Jonathon Remodeling Co., an accrual-method taxpayer, remodels and renovates an office building for Dale and bills him $30,000. Dale signs a note for the debt. Dale keeps delaying payment and files bankruptcy in 2014. Creditors are informed that no assets are available for payment.  Jonathon Remodeling.
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92) Parveen is married and files a joint return. He reports the following items of income and loss for the year: Salary$ 135,000 Activity A (passive)13,000 Activity B (nonbusiness rental real estate)              ( 45,000) If Parveen actively participates in the management of Activity B, what is his AGI for the year and.
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93) Hope is a marketing manager at a local company.  Information about her 2013 income and expenses is as follows: Income received Salary $150,000 Taxes withheld from salary: Federal income tax                $30,000 State income tax                         8,000 Social Security tax                      9,300 Medicare tax                               2,175 Interest income from bank 6,000 Dividend income from U.S. stocks 4,000 Short-term capital gain 2,000 Long-term capital gain 3,000 State income tax refund.
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11) Capital expenditures for medical care which permanently improve or better the taxpayer's property are deductible to the extent the cost exceeds the increase in fair market value to the property attributable to the capital expenditure. 12) Expenditures incurred in removing structural barriers in the home of a physically handicapped individual.
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109) Margaret, a single taxpayer, operates a small pottery activity in her spare time. During the current year, she reported the following income and expenses from this activity which is classified as a hobby: Revenue from sale of pottery$ 4,000 Depreciation on potter's wheel( 3,000) Property taxes on shed where she does.
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113) Joy purchased 200 shares of HiLo Mutual Fund on July 15, 2009, for $10,500, and has been reinvesting dividends. On December 15, 2013, she sells 100 shares. AmountNo. of shares Purchase July 15, 2009$10,500200 Reinvested dividends, Oct 1, 201080010 Reinvested dividends, Oct 1, 201197020 Reinvested dividends, Oct 1, 2012       980   20 $ 13,250$250 What is.
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98) Harley, a single individual, provided you with the following information for this year: Income: Salary from part-time employment $ 16,000 Interest income from savings 1,000 Net long-term capital gain from investment property 3,000 Deductions: Net business loss (sales of $100,000 less expenses of $130,000) ($30,000) Personal exemption (   3,900) Standard deduction (   6,100) Net-operating loss carryover from last year (   3,000) What is the.
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88) Kendal reports the following income and loss: Salary$120,000 Income from activity A36,000 Loss from activity B( 30,000) Loss from activity C( 60,000) Activities A, B, and C are all passive activities, but none are rental properties.  What is the amount of the suspended loss attributable to each activity? 89) During the year, Patricia.
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101) Melanie, a single taxpayer, has AGI of $220,000 which includes $160,000 of salary and $60,000 of investment income.  She will pay Medicare tax on the $60,000 of investment income of A) $-0-. B) $2,280. C) $760. D) $870. 102) In the current year, ABC Corporation had the following items of income, expense, gains,.
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104) What is the treatment of charitable contributions in excess of the applicable limits for the current year? 105) Explain how tax planning may allow a deduction of qualified medical expenses. 106) Explain what types of tax planning are available for taxpayers making charitable contributions. 107) Jill is considering making a donation to.
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89) During the current year, Deborah Baronne, a single individual, paid the following amounts: Federal income tax$10,000 State income tax$4,000 Real estate taxes on land in France              $1,500 Real estate taxes on land in U.S.              $1,700 State sales taxes$2,000 State occupational license fee              $   600 How much can Deborah deduct in taxes as itemized deductions? 90) Phoebe's AGI.
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1) Deferred compensation refers to methods of compensating employees based upon their current service where the benefits are deferred until future periods. 2) If an individual is self-employed, business-related expenses are deductions for AGI. 3) Unreimbursed employee business expenses are deductions from AGI. 4) An employer-employee relationship exists where the employer has the.
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112) Ben is a well-known professional football quarterback.  His team's owners expect him to be a role model for young people.  Any endorsement contracts that he receives are based on his reputation.  In the current year, Ben is charged with assault.  Ben hires an attorney to represent him in this.
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21) Business investigation expenses incurred by a taxpayer who is already involved in a similar business and who enters the new business are deductible currently. 22) Rachel has significant travel and entertainment expenses for her work, but she has not kept receipts.  She will be able to deduct a reasonable amount.
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41) Van pays the following medical expenses this year: •$1,500 for doctor bills for Van's son who is claimed as a dependent by Van's former spouse. •$300 for Van's eyeglasses. •$900 for Van's dental work. •$3,800 for Van's face lift. Van, a newscaster, is worried about the wrinkles around his eyes. How much can Van.
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