Assignment
1. Payton purchased his home for $300,000. As a sole proprietor, he operates a certified public accounting practice in his home. For this business, he uses one room exclusively and regularly as a home office. In Year 1, $1,450 of depreciation expense on the home office was deducted on his income tax return. In Year 2, Payton sustained losses in his business, so no depreciation was taken on the home office. Had he been allowed to deduct depreciation expense, his depreciation expense would have been $1,700. What is the adjusted basis in the home?
$295,000
$296,850
$298,550
$300,000
None of the above
2. Leopard Corporation has ordinary income from operations of $50,000, net long-term capital gain of $20,000, and net short-term capital loss of $30,000. What is the taxable income for 2012?
$40,000
$47,000
$50,000
$70,000
None of the above
3. In 2012, Colleen makes the following charitable donations.
Basis Inventory held for resale in Colleen's Business (a sole proprietorship) Stock in Macro held as an investment (acquired 4 years ago)
|
|
Fair Market Value
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|
|
$14,000
|
$7,000
|
|
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$16,000
|
$30,000
|
|
|
Painting held as an investment (acquired 3 years ago)
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$2,000
|
$15,000
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4. The Macro stock and the inventory were given to Colleen's church, and the painting was given to the United Way. Both donees promptly sold the property for the stated fair market value. Disregarding percentage limitations, Colleen's charitable contribution deduction for 2012 is _____.
$32,000
$39,000
$52,000
$59,000
None of the above.