Reference no: EM133153425

Question 1 - For the current year, David has salary income of $70,OOO and the following property transactions:

1. Investment in land of $9,000

2. Long-term capital gain $11.000

3. Short-term capital loss $16,000

4. Loss on sale of camper $3,000 (purchased 4 years ago and used for family vacations)

What is David's AGI for the current year?

Question 2 - Tom was injured in an automobile accident and received $30,000 for his physical injury, $5,000 in punitive damages, $6,000 lost wages and $3,000 in workers compensation. His wife Tia received $ 10,000 for his loss of his services. As a result of the award, the amount Tom must include in gross income is?

Question 3 - Jane and Ed Rochester are married with a 2-year-old child, In 2020, Ed and Jane realized the following items of income and expense: Amount Items: $ 30,000 Ed's Salary, $75,000 Jane's Salary , $400 Municipal bond interest income, OID interest $1,000, $8,000 Alimony paid (divorce in 2018) and $15,000 Real property tax, . Their employers withheld $5,800 in federal income taxes from their paychecks.

1. What is their Taxable Income?

Question 4 - Jack and Jill have 4 children ages 2, 13, 15, and 17 their adjusted gross income was $200,000.

What is the amount of the child tax credit on the couple's income tax return in 2021?

Question 5 - During the year jack sold the following assets: Automobile for a $1,000 loss, Stock investment for a $3,000 loss, and his personal boat for a $500 loss?

How much of these losses may jack claim?

Question 6 - George a cash basis taxpayer, received the following amounts this year:

Interest on savings accounts $2,000

Interest on State Tax refund 600

Interest on City of Salem school bonds 300

Federal tax refund 800

Dividends on USG common stock 200

Verizon phone rebate 150

Repayment on loan 500

What is George's Income?

Question 7 - 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 8 - 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 9 - 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 10 - 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 11 - 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 12 - 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 13 - 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 14 - 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?

Question 15 - This year Ed celebrated his 25th year as an employee of Designer Jeans Company. In recognition of his long and loyal service, the company awarded Ed a -gold watch worth $400 and a $2,600 cash bonus. What amount must Ed include in his gross income?

Question 16 - Which of the following is not indexed to inflation under the tax law.

A. The standard deduction

B. The child tax credit

C. Dependency and personal exemptions

D. The tax indexation (brackets)

Question 17 - Edgar, an employee of Sam Corp. Edgar Dies suddenly. Sam Corp. pays his widow, Ann $4,000 in accrued wages, and $4,500 in light of the family's financial needs. What amount if any, can be included in gross income?

Question 18 - Jimmy, is a freelance writer who reports income on a cash basis:

Cash received for articles $50,000

TV Game show winnings 2,700

Loss on sale of stock 800

Appreciation of investment property 1,000

NYC Bond interest 200

What is Jimmy's Adjusted Gross income?

Question 19 - Under the terms of a divorce agreement entered into in 2019, Ron is to pay his former wife Jill $10,000 per month. The payments are to be reduced to $7,000 per month when their 15-year old child reaches age 18. Assuming all of the other conditions for alimony are satisfied, What amount can Ron deduct from gross income for the year as alimony?

Question 20 - Which of the following is not subject to Federal Income tax?

A. U.S. Treasury bills

B. OID interest

C. Workers Compensation

D. Federal Tax interest refund ·

Question 21 - Jack was employed during the first six months of the year and earned a $90,000 salary. During the next six months, he collected $7,000 of workers' compensation, borrowed $6,000 and withdrew $1,000 from his savings account (including $100 interest). When he left his former employer, he withdrew his retirement benefits a lump sum of $44,000. He made no contributions to the plan. Jack's parents loaned him $5,000 on July 1, of the current year. Jack did not repay the loan during the year and used the money for living expenses. Calculate Jack's adjusted gross income for the year.

Question 22 - Mark is a salesperson and a cash-method taxpayer. His earnings for the year were $70,000. During the year he received $10,000 in advances on future commissions. He repaid $3,000. How much income should Mark report for the year?

Question 23 - Sam age 56 and sally age 49 are married. Neither is covered by an employer retirement plan. What is the maximum amount they can contribute to an IRA account for 2021?

Question 24 - John files a return as a single taxpayer. In 2021, he had the following items:

Salary of $70,000

Loss of $65,000 on sale of section 1244 stock acquired two years ago.

Interest income of $5,000

Determine John's AGI for 2021?

Question 25 - Roger, age 19, received the following payments:

$3,600 State scholarship for ten months (tuition and books).

$1,500 Loan from college financial aid office

$1,700 Interest on NYC bond

$1,600 Interest on T Bill.

$1,400 Interest on OID

$2,000 Summer Employment

$300 State Tax Refund

What is Rogers adjusted gross income?