accounting 417580

14. (TCOs 2 & 11) Jojo decided to care for her Uncle Vince in his old age. Jojo was unaware that her uncle had securities valued with a fair market value of $75,000 at the time she started caring for her uncle. Uncle Vince made no promise to Jojo regarding payment for his care. However, the cost of comparable care in a nursing home would have been $50,000. Vince executed a will that gave the securities to Jojo. The fair market value of the securities at the time of Vince’s death was $175,000. Jojo was Vince’s favorite relative, and Jojo did not need the money. Jojo’s gross income from the receipt of the stock is: (Points : 5)

15. (TCOs 2 & 11) Upon the recommendation of a physician, Roberto has a therapeutic pool installed in his personal residence. He suffers from severe muscular degeneration disease. If Roberto does not use the pool on a regular basis, his muscles will deteriorate to the point that he will be unable to walk. In connection with this pool, Roberto incurs and pays the following amounts during the current year:

The pool has an estimated useful life of 5 years. The appraisal was to determine the value of Roberto’s residence with and without the pool. The appraisal states that the pool increased the value of Roberto’s residence by $4,000. Disregarding percentage limitations, how much of the above expenditures qualify for the medical expense deduction in the current year? (Points : 5)

1. (TCO 1) The federal income tax applicable to corporations: (Points : 5)

2. (TCOs 2, 3, 6, 8, 9, & 10) Jude has a NLTCG of $25,000 and a NSTCL of $30,000. What is Jude’s 2011 capital loss deduction if Jude’s adjusted gross income for 2011 (before considering capital asset transactions) is $90,000? (Points : 5)

3. (TCOs 2, 3, 6, 8, 9, & 10) Paris is a cash basis landlord. An earthquake destroyed one of his residential rental buildings. Even though the lease required the tenants (all cash basis) to continue to pay rent, Paris accepts a payment of $2,000 in full cancellation of the lease. As a result of these events: (Points : 5)

4. (TCOs 2, 3, 6, 8, 9, & 10) Equity considerations can be used to justify: (Points : 5)

5. (TCOs 2, 3, 6, 8, 9, & 10) During the current year, Carolyn is supported as follows:

During the year, Carolyn lives with Torie in his home for 10 months and in her home for 2 months. Under a multiple support agreement, who could qualify for the dependency deduction for Carolyn? (Points : 5)

6. (TCOs 2, 3, 6, 8, 9, & 10) Which statement is true with respect to letter rulings? (Points : 5)

7. (TCO 6 ) Which, if any, of the following property is subject to A?§ 1245 recapture? (Points : 5)

8. (TCO 6) Leopard Corporation has ordinary income from operations of $50,000, net long term capital gain of $20,000, and net short term capital loss of $30,000. What is the taxable income for 2011? (Points : 5)

9. (TCO 6) During 2011, taxpayers decided to sell their residence, which had a basis of $350,000. They had owned and occupied the residence for 8 years. To make it more attractive to prospective buyers, they had it painted in April at a cost of $5,000 and paid for the work immediately. They sold the house in May for $500,000. Broker’s commissions and other selling expenses amounted to $30,000. They purchased a new residence in June for $250,000. What is the realized gain? (Points : 5)

10. (TCO 6) Herbert exchanges a business machine, which has an adjusted basis of $40,000, for a new machine worth $40,000. In addition, he receives cash of $10,000. What is the recognized gain or loss and the basis of the new machine? (Points : 5)

11. (TCOs 2, 6, & 11) Claudia sells property for a sales price of $170,000. In addition, Karma, the buyer, pays $5,000 in property taxes that had accrued during the year while the property was still legally owned by Claudia. Claudia paid $9,000 in commissions and $1,500 in legal fees connected with the sale of her property. What is the amount realized by Claudia from the sale of her property? (Points : 5)