Reference no: EM132380618
Question
1. An individual donates artwork to San Francisco General Hospital. This was the only charitable contribution the taxpayer makes during the year. The artwork was purchased several years ago for $50,000; it is worth $140,000 at the time of the donation. The taxpayer's AGI is $160,000. Which of the following could be an accurate statement regarding the taxpayer's charitable deduction for the artwork?
a. The taxpayer deducts $80,000 in the current year and carries over $60,000 to the next year.
b. The taxpayer deducts $48,000 in the current year and carries over $2,000 to the next year.
c. The taxpayer deducts $48,000 in the current year and carries over $92,000 to the next year.
d. The taxpayer deducts $50,000 in the current year and carries over $0 to the next year.
e. None of the above statements could be accurate with respect to the taxpayer's charitable contribution deduction.
2. A taxpayer donates land to his church. The taxpayer paid $55,000 for the land several years ago. It is worth $75,000 at the time it was donated. This was the only charitable contribution the taxpayer made during the year. If the taxpayer's AGI is $100,000, which of the following could be an accurate statement regarding the taxpayer's charitable deduction for the land?
a. The taxpayer deducts $55,000 in the current year.
b. The taxpayer deducts $50,000 in the current year and carries over $25,000 to the next tax year.
c. The taxpayer deducts $30,000 in the current year and carries over $25,000 to the next tax year.
d. The taxpayer deducts $30,000 in the current year and carries over $45,000 to the next tax year.
e. Both a. and d.
3. The Martins file a joint return. Their AGI is $375,800. The Martins report the following amounts on Schedule A: home mortgage interest, $12,920; real estate taxes, $5,100; and $7,000 of cash gifts to qualified charities. The amount the Martins will deduct from AGI for their itemized deductions is:
a. $23,160.
b. $13.746.
c. $18,584.
d. $25,020.
e. $21,491.
4. A cash-basis sole proprietor had the following cash receipts and disbursement for the year:
Net sales $80,000
Cost of goods sold 40,000
Operating expenses 20,000
Employee payroll taxes 3,000
Dividend income 900
Interest income from a personal savings account 200
What is the amount of reported net profit reported on Schedule C?
a. $20,000
b. $40,000
c. $17,000
d. $15,000
e. $18,000
5. Allen owns land with an adjusted basis of $610,000, subject to a mortgage of $350,000. On April 1, Allen sold his land subject to the mortgage for $650,000 in cash, a note for $600,000, and property with a fair market value of $120,000. What is the amount realized?
a. $1,250,000
b. $1,370,000
c. $1,720,000
d. $1,820,000
e. None of the above is correct