ACC401 week 2

ACC401 Week 2 Assignment 2

Chapter 4

53. Under  the terms of a divorce decree executed May 1, 2010, Rob transferred a house worth $650,000 to his ex-wife, Linda, and was to make alimony payments of $3,000 per month. The property has a tax basis to Rob of $300,000.

a.    How much of this must be reported on Linda’s tax return?

 b.    Of that amount, how much is taxable gain or loss that Linda must recognize related to the transfer of the house?

54. under the alimony recapture rules, what amounts are designated for recapture reclassification, and what are the tax consequences?

55.  Indicate whether each of the following items is considered a for AGI, (above-the line) deduction for the 2010 tax year.

a. Student loan interest.

b. Gambling losses.

c. Early withdrawal penalty.

d. Child support payments.

e. Charitable contributions.

f. One-half of self-employment taxes.

g. Alimony.

h. Scholarships for tuition and books.

i. Moving expenses.

j. Property taxes.k. Self-employed health insurance premiums.

 Chapter 5

54.  Steve purchased a personal residence from Adam. To sell the residence, Adam agreed to pay $4,500 in points related to Steve’s mortgage. Discuss the tax consequences from the perspectives of both Steve and Adam.

61.  Reynaldo and Sonya, a married couple, had flood damage in their home due to a faulty water heater during 2010,  which ruined the furniture in their garage. The following items were completely destroyed and not salvageable.

62.  During the year 2010, Ricki, who is not self-employed and does not receive employer reimbursement for business expenses, drove her car 5,000 miles to visit clients, 10,000 miles to get to her office, and 500 miles to attend business-related seminars. She spent $300 for airfare to another business seminar and $200 for parking at her office. Using the car expense rate of 50 cents per mile, what is her deductible transportation expense?