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W5k Roger has personal debt of 93000 which includes credit card debt, retail store and unsecured loans. Roger has lost his job and has no way to make payments on this debt. Rover files for bankruptcy. His tax preparer informs him that hi debt has been discharged but he must include the 93000 as gross income! True or false

Generally amounts excluded from income are not required to be reported on the taxpayer’s tax return. Insurances premium paid by your employer are not tax return. There are exceptions. which of the following will be reported on your tax return? A) gifts and inheritances B) unrealized income C) tax-exempt interest D) life insurance proceeds

Stock is purchased for 30$ per share on February10. On December 31st the market price per share is 45$ per share. This increase in market price share is included in gross income by multiplying the increase in market price by the number of share owned. True or false

Proceeds from a life insurance policy will always be excluded from gross income true or false

W6k

A realized gain occurs when property is sold for an amount greater than the fair market value of the property. True false

Net long-tern capital losses of 10,000 for the year but no net short-term capital gains. How much of the loss can be use to offset ordinary income?

0,3000,10,000 7,000

When using the constant interest rate method for amortization of ordinal issue discount the interest income each year will increase while the basis in the bond will decrease. True or false

The distinction between a sale and an exchange of property is that:

A sele involves cash or the assumption of debt and an exchange involves the reciprocal transfer of property. B) sale involves the assumption of debt and an exchange involves the transfer of cash for property. C there is no distinction the terms are used interchangeably. D) a sale involves cash and an exchange involves the assumption debt and a transfer of property.

A recognized gain occurs when property is sold for an amount greater than the cost basis of the [roperty and this is actually reported on the tax return, True or false

There is no need to determine of the property based on the following: cash paid to seller of 120,00 signing of a note payable to the seller of 50,000 and assumption of a lien on the property of 6,000. A) 170,00 B) 176000 C) 120,000 D) 50,000 if a taxpayer sells property received as a gift when the fair market value is used as the done basis the holding period: a) always considered long term, B) considered to start on the day after the date of the gift. C) the holding period of the donor. D) the holding period of the donor plus the time the property is held by the done.

W7k

Expenses related to the maintenance of a vacation home which qualifies as the taxpayer residence, are fully deductible: allocation of expenses is not required under Section 280A> true False

The burden of proof lies with the taxpayer, therefore it is necessary to maintain proper documentation to support expenditures. Supporting documentation should include receipts, cancel checks and paid bills. True false

Test for deductibility include all of the following expect: Necessary: reasonable: realizable” ordinary

Gross income includes illegal income: therefore expenditures related to the production of that income is deductible expenditure: true falls

Deduction for AGI include all of the following except: itemized deduction: deduction schedule E. schedule f schedule C

Legal and accounting fees are only deductible from AGI as miscellaneous itemized deduction: true or fales

Which of the following is not a deduction for AGI:

Student loan interest, 50% of self-employment tax imposed on self-employed individuals, alimony mortgage interest.

Political contribution can be deducted if they are paid to a tax-exempt organization because the taxpayer does not directly influence legislation, participate in a political or influence the general public with respect to elections true or false.

Your friend has lost his job and in unable to pay the property tax on her home, you decide to pay her property taxes and take the deduction on your tax return. You are permitted to take this deduction because you paid the taxes in the current tax year: true or false

Factors to determine if an activity is profit-motivated included all of the following expect: the taxpayer history of income or losses with respect to the activity, the number of employees the taxpayer employs in carrying on the activity. the expertise of the taxpayer or the taxpayers advisors. The time and effort expended by the taxpayer in caring on the activity