ACC 307 Federal Taxation: Final Exam Answers

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ACC 307 Federal Taxation Final Exam Answers ACC 307 Federal Taxation Final Exam Answers ACC 307 Final Exam Solution Part 1 • Question 1 The § 222 deduction for tuition and related expenses is available: • Question 2 A worker may prefer to be classified as an employee (rather than an independent contractor) for which of the following reasons: • Question 3 Aaron is a self-employed practical nurse who works out of his home. He provides nursing care for disabled persons living in their residences. During the day he drives his car as follows. Miles Aaron’s home to patient Louise 12 Patient Louise to patient Carl 4 Patient Carl to patient Betty…show more content…
Black Company’s deduction for wages for the year is: • Question 3 Several years ago, Tom purchased a structure for $300,000 that was originally placed in service in 1929. Three and one-half years ago he incurred qualifying rehabilitation expenditures of $600,000. In the current year, Tom sold the property in a taxable transaction. Calculate the amount of the recapture of the tax credit for rehabilitation expenditures. • Question 4 In terms of the withholding procedures, which statement does not reflect current rules? • Question 5 The ceiling amount and percentage for 2013 for the Medicare portion of the self-employment tax are: • Question 6 If the taxpayer qualifies under § 1033 (nonrecognition of gain from an involuntary conversion), makes the appropriate election, and the amount reinvested in replacement property is less than the amount realized, realized gain is: • Question…show more content…
She converts the property to rental property when the fair market value is $115,000. After deducting depreciation (cost recovery) expense of $1,130, she sells the house for $120,000. What is her recognized gain or loss? • Question 11 Hiram is a computer engineer and, while unemployed, invents a switching device for computer networks. He patents the device, but does not reduce it to practice. Hiram has a zero tax basis for the patent. In consideration of $800,000 plus a $1 royalty per device sold, Hiram assigns the patent to a computer manufacturing company. Hiram assigned all substantial rights in the patent. Which of the following is correct? • Question 12 Lynne owns depreciable residential rental real estate which has accumulated depreciation (all from straight-line) of $65,000. If Lynne sold the property, she would have a $53,000 gain. The initial characterization of the gain would be: • Question 13 Which of the following creates potential § 1245 depreciation recapture and potential § 1231 gain? • Question 14 A business taxpayer sells inventory for $80,000. The adjusted basis of the property is $58,000 at the time of the sale and the inventory had been held more than one year. The taxpayer

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