Reference no: EM133129423

Question 1 - Mr. and Mrs. Green ages 67 and 65 received the following income in the current year. Interest on a Certificate of deposit $3,000. Wages from consulting work $ 45,000. Social Security $18,000 They did not have any adjustments to income. What percentage of their Social Security benefits is taxable?

A. 0%

B. 50%

C. 85%

D. 100%

Question 2 - Jiggs is actively engaged in the oil business. During the year 2021 he made several trips to inspect oil wells. As a result of his business trips he incurred the following expenses.

Transportation costs $4,000,

Hotels $1,000,

Meals $600,

Entertainment $500,

Consulting fees $600,

And lobbying fees $1,800.

What amount can Jiggs, claim as deductible expenses?

Question 3 - Jill, a widow, elected to receive the proceeds of a $200,000 life insurance policy on the life of her deceased husband in 10 installments of $22,500 each. Her husband had paid premiums of $60,000 on the policy. In the first year, Jill collected $22,500 from the insurance company. What must she must include in gross income?

Question 4 - Shaun is a student who has received an academic scholarship to State University. The scholarship paid $14,000 for tuition, $2,500 for student fees, $1,000 for books and $500 for meals. In addition, Shaun earned $6,500 to counsel freshmen on-campus living. What amount must Shaun include in his gross income?

Question 5 - Jack owns two motels in New York and travels to Boston to discuss purchasing another motel. Jack incurred the following expenses: $1,000 Travel, $1,000 Accounting fees, and $4,400 Marketing studies.

1. What amount if any can Jack deduct as expenses if he decides not to purchase the motel?

2. What amount if any can Jack deduct as expenses if he decides to purchase the motel?

Question 6 - Ellen operates a sole proprietorship that earns $200,000 of qualified business income. The sole proprietorship is not a specified service business. She files a single tax return for 2020. Assume her modified taxable income before the QBI deduction is $175,000. Ellen's QBI deduction for 2020 is?

Question 7 - MJ Consultants. incurred the following business expenses:

Bank service charges $50

Supplies 1,000

Fees to attorneys 2,000

Credit card interest 200

Loan from bank 3,000

Entertainment 500

What amount can MJ Co. deduct this year?

Question 8 - Ann has the following stock transactions. What amount is included in her gross income if she paid a $200 selling commission for each sale?

Purchases:

100 shares of IBM total purchase price $55,000

50 shares of ATT Total Purchase price $7,500

50 Shares of GE Total purchase price $5,000 Sales:

Sold 100 shares of IBM for $60,000

Sold 50 shares of GE for $7,000

What amount should be included as income?