need acc401 federal income tax

CHAPTER 6

39. David is a college professor who does some consulting work on the side. He uses 25% of his home exclusively for the consulting practice. He is single and 63 years old. His AGI (without consideration of consulting income) is $45,000. Other Information follows:

Income from consulting business $4,000

Consulting expenses other than home office 1,500

Total cost relating to home:

Interest and taxes 6,500

Utilities 1,500

Maintenance and repairs 450

Depreciation (business part Only) 1,500

Calculate David’s AGI:

43. Janet purchased her personal residence in 2004 for $250,000. In January, 2014, she converted it to rental property. The fair market value at the time of conversion was $210,000

a. Determine the amount of cost recovery that can be taken in 2014.

b. Determine the amount of cost recovery that could be taken in 2014 if the fair market value of the

property were $350,000.

CHAPTER 7

49. Ricardo acquired a warehouse for business purposes on August 30, 1995. The building cost $400,00. He took $226,900 of depreciation on the building and then sold it for $5000, on July 1, 2014. What are the amount of and nature of Ricardo’s gain or loss on the sale of the warehouse?

a. What is the adjusted basis for the warehouse?

b. What amount of the gain or loss is realized on the sale of the warehouse?

c. What amount of the gain or loss is unrecaptured?

d. At what rate is the unrecaptured gain or loss taxed?

e. What amount of gain or loss qualifies as a §1231 gain or loss?

51. In 2014 Rosalva sold stock considered short-term for a gain of $875 and stock considered long-term for a loss of $3,400. She also had a $3,000 short-term loss carryover from 2013 and a $1,240 long-term loss carryover from 2013.

a. What amount will be shown as a short-term gain (loss) for 2014?

b. What amount will be shown as a long-term gain (loss for 2014?

c. How much of the loss is deductible in 2014?

d. What is the amount of long-term carryover to 2015?

CHAPTER 8

37. Matt and Marie own a vacation home at the beach. During the year, they rented the house for 42 days(6 weeks) at $890 per week and used it for personal use for 58 days. The total cost of maintaining the home are as following:

Mortgage interest $4,500

Property Taxes 700

Insurance 1,200

Utilities 3,200

Repairs 1,900

Depreciation 5,500

a. What is the proper tax treatment of this information on their tax return using the Tax Court Method?

b. Are there options available to allocate the expenses between personal and rental use.

Explain:

c. What is the proper tax treatment of the rental income and expenses if Matt and Marie rented the house for only 14

days?

39. Janet owns a home at the lake. She incurs the following expenses:

Mortgage interest $1,300

Property taxes 800

Insurance 1,500

Utilities 1,800

Repairs 300

Depreciation 4,000

What is the proper treatment of the rental property and expenses in each of the following cases? Use the Tax Court allocation method if applicable.

Case Rental Income Days rented Personal Use Days

A $ 9,000 45 10

B 12,000 55 25

C. 6,000 10 30

D. 22,000 365 -0-