Reference no: EM132959874

Questions -

Q1- Patricia, an unmarried taxpayer who is head of household, has adjusted gross income of $42.800 and incurs $4,000 of child care expenses for part-time care of her 8 year old son, Joshua. Patricia can shelter up to $5,000 (or her expenses if less) in an employer provided childcare reimbursement program or take the Child and Dependent Care Credit. If Patricia clects not to participate in the employer provided program and takes the Child and Dependent Care Credit, what is the amount of her tax credit for 2020?

Q2- Sam had a long term Section 1231 gain of $10,000 in 2020. in 2019 he had an $8,000 Section 1231 loss. How much of Sam's 2020 Section 1231 gain will be treated as longterm capital gain?

Q3- Bill single taxpayersells his principal residence in the current year for $300,000. He bought the residence 20 years ago for $105.000 and has lived in it since. What is the correct tax treatment for this gain?

a- He has a realized and recognized gain of $195.000

b- He has a realized but no recognized gain

c- He has a realized gain of $195.000 but he may defer recognition of that gain by purchasing a replacement home for at least $300,000

d- none of the above

Q4- Sarah's business property was condemned by the state for highway construction through the location of her business. The state wwarded Sarah $250,000 for the property. Sarah's basis in the property was $140,000 . Sarah relocated to another locale and purchased a qualified replacement property for $225,000 within the required time period What is the correct statement describing the result of these transactions?

a- Sarah has a realized and recognized gain of $110,000 and a $225,000 basis in her property

b- Sarah has a realized gain of $110,000 but it is all deferred because she replaces the former property

c- Sarah has a realized gain of $110.000, a recognized gain of $25,000, and a basis of $ 140,000 in her replacement property

d- Sarah has a realized gain of $ 110.000, a recognized gain of $25,000, and a basis of $165,000 in her replacement property.