20 MCQ's

1. What was Leslie’s 2012 Net Operating Loss amount assuming that she had the following items listed on her income tax return?
Business Income $50,000
Interest income on personal investments $5,000
Less: Business Expenses ($60,000)
Less: Personal exemption ($3,800)
Less: Non business deductions ($7,000)
Loss shown on return ($15,800)
1.$15,800
2.$10,000
3.$5,000
4.$0
 
2.Heidi’s business incurred a casualty loss in 2012.  Immediately before the casualty, her business truck had an adjusted basis of $30,000 and a fair market value of $20,000.  Immediately after the casualty, the truck had a fair market value of $5,000.  Because of the truck damage, Heidi’s insurance company provided $5,000 as a reimbursement in 2012.  What was Heidi’s 2012 casualty loss deduction?
1.$10,000
2.$15,000
3.$20,000
4.Unknown (because we must know Heidi's AGI)

3.Ligia’s boss gave her two tickets to the Pink concert because she met her sales quota.  At the time Ligia received the two tickets, they had a face value of $100 each and were selling on eBay for $200 each.  On the date of the concert, the tickets were selling for $350 each.   Ligia and her son attended the concert.   How much gross income should Ligia report as a result of the tickets?
1.$700
2. $400
3. $200
4. $0

4. Chervaughn Corporation acquired new office furniture on July 13, 2012, for $70,000.  Chervaughn did not elect immediate expensing under Section 179.  Chervaughn elects not to take the additional first-year depreciation.  Determine Chervaughn’s cost recovery for 2012.
1. $0
2. $10,000
3. $20,000
4. $70,000

1. What include in a keyword search when you wish broaden the search and find any documents containing at least one of a list of two or more terms?
A. AND
B. *
C. NOT
D. OR

2. helpful to use keywords when searching for ideas related to your subject because doing so
A. allows you to finish your research after one single search.
B. can lead you to other, more refined topics within you subject.
C. provides exact results.
D. enables to avoid plagiarism.

3. In MLA style, how long must a quote be to be a block quotation?
A. More than 8 lines
B. More than 2 lines
C. More than 4 lines
D. 50 words or more

4. Why it’s helpful to search for a bibliography on a topic?
A. bibliography provides only books you can use as sources.
B. bibliography search normally isn't helpful.
C. Once you complete the basic bibliography search, you're finished finding sources.
D. bibliography can provide you with a list of various sources on your topic.

1. When skimming a source, helpful guideline to follow is to
A. read the first sentence of each paragraph.
B. read the entire source.
C. skip the first and last paragraphs.
D. pay no attention to any pictures, maps, or charts.

2. Which of the following is a false statement about an APA References page?
A. You should organize the list according to publication date, with the oldest date first.
B. You should italicize titles of books and names of journals.
C. You should double-space the entire list.
D. You should put the list on a separate page at the end of your paper.

3. Which of the following is an example of opinion?
A. The Canadian men's hockey team won the gold medal in the 2010 Winter Olympics.
B. Abraham Lincoln presented the Gettysburg Address on November 19, 1863.
C. The color blue sometimes signifies sadness or depression.
D. Organic food should be made more affordable.

4. In which of the following situations would paraphrasing be useful and ethical?
A. You wish to make it seem as if the author's ideas are yours.
B. You want to change the author's meaning.
C. You want to use an author's idea but don't wish to quote the author directly.
D. You don't fully understand what the author is saying.

1. On August 5, 2012, Descartes purchased a new office building for $1 million.  On October 3, 2012, she began to rent out office space in the building. What is Descartes’s cost recovery for 2012?
a. $100,000
b. $25,641
c. $5,350
d. $0

2.Assume the same facts as in the previous problem.  Assume further that Descartes sells the office building on July 12, 2016.  What is Descartes’s cost recovery for 2016?
a. $100,000
b. $25,640
c. $13,888
d. $0
Nhi and Nehemiah recently formed a corporation named 2N, Inc. (or “2N”).  On December 31, 2011, 2N issued 800,000 shares of common stock to Nhi and 800,000 shares of common stock to Nehemiah.  Nhi and Nehemiah each paid $0.01 per share for their stock ($0.01 equaled the per share fair market value on December 31, 2011).  Their stock is subject to a 4-year “repurchase option” (at cost) in favor of 2N.  Each 2N repurchase option will “lapse” over time so that on December 31 (of 2012, 2013, 2014 and 2015), 200,000 shares will be released from the repurchase option.  For example, if Nhi quits 2N before December 31, 2015, 2N can repurchase Nhi’s “unvested shares” for $0.01 per share (no matter what the fair market value is on that date).

3.Assume that Nhi DID file a timely “83(b) election.”  On December 31, 2012, Nhi is still working at 2N and thus 200,000 of Nhi’s 800,000 shares are “released” from the 2N repurchase option (i.e., 200,000 of Nhi’s shares “vest” on December 31, 2012).  On that same day, the fair market value of the 2N stock was $1.01 per share. What 2012 income, if any, must Nhi report as a result of these events?
a.$800,000
b.$202,000
c.$200,000
d.$0

4.Assume that Nehemiah DID NOT file a timely “83(b) election.”  On December 31, 2012, Nehemiah is also still working at 2N and thus 200,000 of Nehemiah’s 800,000 shares are also “released” from the 2N repurchase option (i.e., 200,000 of Nehemiah’s shares “vest” on December 31, 2012).  On that same day, the fair market value of the 2N stock was $1.01 per share.  What 2012 income, if any, must Nehemiah report as a result of these events?
a.$800,000
b.$202,000
c.$200,000
d.$0

1.  In March 2012, Rion, a calendar-year taxpayer, purchased new 7-year property for $500,000.  The property was immediately placed into service (and is being used exclusively in Rion’s extremely profitable business).  No other personal property will be purchased by Rion in 2012.  Rion wants to take the largest possible tax deduction in 2012 relating to the equipment.  Compute the largest tax deduction possible in 2012 for the equipment (consider the Section 179 election, Bonus Depreciation, and MACRS, if applicable):
1.$500,000
2.$345,293
3.$319,500
4.$139,000

2. During 2012, 7-year MACRS property was placed in service by Ayaris, a calendar-year taxpayer.  Assume that Ayaris does NOT make a Section 179 election or take any bonus depreciation.  The property will most likely be depreciated over:
1.Eight calendar years
2.Seven calendar years
3.Three and one-half calendar years
4.One calendar year

3.Andreina contributed some inventory from her sole proprietorship to a public charity for its use.  On the date of the contribution, Andreina’s basis in the inventory was $10,000 and the fair market value was $21,000.  What is the amount of charitable contribution allowed (before considering any potential percentage limitation)?
1.$0
2.$10,000
3.$11,000
4.$21,000

4.What was Tomoe’s Taxable Income for 2012? Assume Tomoe is single and has TWO dependent children, Fritznel and Micheala.  Assume further that Tomoe’s 2012 AGI is $75,000 and that Tomoe had itemized deductions of $13,000.
1.$50,600
2.$54,400
3.$62,000
4.$75,000