Multiple choice

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