Linda paid the following expenses in 2016 relating to her home: realty taxes, $4,000; mortgage interest, $7,000; casualty insurance, $390. Linda does not rent out any portion of her home. The casualty insurance premium of $390 is
A. Allowed as an itemized deduction subject to the $100 floor and the 10%-of-adjusted-gross-income floor.
B. Deductible in arriving at adjusted gross income.
C. Not deductible.
D. Allowed as an itemized deduction subject to 2% floor.
1. Gina, who is single, sells her principal residence, which she owned and occupied for 8 years for $475,000.00. Her adjusted basis in the residence is $122,000.00. What is her recognized gain presuming that she made the appropriate election under Section 121?
2. Taxpayer exchanges a rental house at the beach with an adjusted basis of $150,000.00 and a FMV of $200,000.00 for a rental house at the mountains with a FMV of $180,000.00 and cash of $20,000.00. What is the recognized gain or loss?
3.Lisa qualified as head of household for 2016 tax purposes. Lisa's 2016 taxable income was $100,000.00, exclusive of capital gains and losses. Lisa had a net long-term capital loss of $8,000.00 in 2016. What amount of this capital loss can Lisa offset against 2016 ordinary income?
4.Suppose a like kind exchange takes place on October 27, 2016. C gives D property which is a capital asset purchased on April 9, 2005. D gives C property which is a capital asset purchased on March 21, 2005.
C gives D property with FMV of $200.00 and Adjusted Basis of $100.00
D gives C property with FMV: $250.00 Adjusted Basis $70.00 and Cash $10.00
What is C s realized gain?
5. What is C's recognized gain?
6.What is Cs basis in the property received?
7.When does C's holding period begin?
8. Mr. Smith's business warehouse was demolished by a tornado on September 10, 2016. On October 4, 2016, Mr. Smith received $80,000.00 in insurance proceeds covering the damage to the warehouse. Mr. Smith's basis in the warehouse was $50,000.00. He purchased a new warehouse on November 10, 2016 for $60,000.00. What is the latest date for Mr. Smith to make an election under §1033 and defer recognition of the gain?
9. If Mr. Smith makes the proper election pursuant to §1033, what is Mr. Smith's recognized gain?
10. Alicia buys a beach house for $425,000 which she uses as her personal vacation home. She builds an additional room on the house for $45,000. She sells the property for $650,000 and pays $20,000 in legal fees in connection with the sale. What is her recognized gain or loss on the sale of the house?
11. Tom Tanner traded in a printing press with an adjusted basis of $20,000.00 for a smaller press valued at $12,000.00. In addition to the smaller press, Tom received $8,000.00 in cash. What is Tom's recognized gain?
12. Albert purchased a tract of land for $140,000.00 in 2009 when he heard a new highway was going to be constructed through the property and that the land would soon be worth $200,000.00. Highway engineers surveyed the property and indicated that he would probably get $180,000.00. The highway project was abandoned in 2016 and the value of the land fell to $100,000.00. What is the amount of loss Albert can claim in 2016?
13. Which of the following expenditures qualifies as a deductible medical expense for tax purposes?
A. Transportation to office of physician for required health care.
B. Vitamins for general health not prescribed by a physician.
C. Health club dues.
D. None of the above.
14. Linda paid the following expenses in 2016 relating to her home: realty taxes, $4,000; mortgage interest, $7,000; casualty insurance, $390. Linda does not rent out any portion of her home. The casualty insurance premium of $390 is
A. Allowed as an itemized deduction subject to the $100 floor and the 10%-of-adjusted-gross-income floor.
B. Deductible in arriving at adjusted gross income.
C. Not deductible.
D. Allowed as an itemized deduction subject to 2% floor.
15. Martha gives 100 shares of Green stock with an adjusted basis of $7,000.00 and FMV of $15,000.00 to her niece, Jennifer. Four months after the date of the gift, Jennifer is killed in an automobile accident. Martha inherits the stock when it has a FMV of $29,000.00. What is Martha's basis in the inherited stock?
16. Jen inherited stock from her Uncle Joe. On the date of Uncle Joe's death, the stock had a basis of $5,000.00 and FMV of $10,000.00. What is Jen's basis in the stock? (Disregard the alternate valuation date for the purposes of this question)
17. Personal/ dependency exemptions are subject to a high income phaseout
A. True
B. False
18. John and Mary filed a joint federal income tax return for the calendar year 2016. Among their cash expenditures were the following:
$5,000 real estate tax on residence: $500 state and city sales taxes; $900 state income tax.
What is the maximum deduction for taxes on their 2016 return?
19. In 2016, Karen's business warehouse was completely destroyed by a hurricane. An appraiser valued the decline in the fair market value at $140,000.00. The adjusted basis of the warehouse was $150,000.00. Later that same year, Karen received $100,000.00 from her insurance company for the property loss. Karen's AGI was $100,000.00 for 2016. What is the amount of the casualty loss that Karen may deduct?
20. James, an unmarried taxpayer, qualifies to itemize in 2016. James's adjusted gross income was $35,000.00 in 2016. In 2016 he made a $400.00 donation to a needy family. In 2016, he also donated stock valued at $3,000.00 to her church. What is James's charitable deduction on his 2016 income tax return?
21. A "nonrelative" can be claimed as a dependent on a taxpayer's individual tax return.
A. True
B. False
22. Kim works at a tax firm in NYC. She commutes to work every day from her apartment in Queens. It costs her $980 for her yearly commuting expense between subway tokens and bus fare.
How much of the commuting expense is deductible as an itemized deduction?
23. Peter's boat was damaged by a storm in June of 2016. It had a FMV of $30,000.00 before the storm and a FMV of $21,000.00 after the storm. The adjusted basis of the boat is $10,000.00. If Peter's AGI for 2016 was $50,000.00, how much of the casualty loss is deductible? (There is no insurance)