1. (TCO E) For federal tax purposes, royalty income not derived in the ordinary course of a business is classified as: 2. (TCO F) When comparing corporate and individual taxation, the following statements are true, except: 3. (TCO H) Charles and Marcia are married cash-basis taxpayers. In Year 8, they had interest income as follows(Becker CPA Review Course): $500 interest on federal income tax refund. $600 interest on state income tax refund. $800 interest on federal government obligations. $1,000 interest on state government obligations. What amount of interest income is taxable on Charles and Marcia’s Year 8 joint income tax return? 4. (TCO B) A contribution made to the following donee is not deductible 5. (TCO A) The following taxes were paid by Tim: Real estate taxes on his home: $1,000 State income taxes: $900 State gasoline tax (personal use of automobile): $150 In itemizing his deductions, what is the amount that Tim may claim as a deduction for taxes? 6. (TCO F) Hoover, Inc. had gross receipts from operations of $230,000, operating and other expenses of $310,000, and dividends received from a 45 percent-owned domestic corporation of $120,000. Hoover’s tax position for the year is: 7. (TCO G) Lane, a single taxpayer, received $160,000 in salary, $15,000 in income from an S Corporation in which Lane does not materially participate, and a $35,000 passive loss from a real estate rental activity in which Lane materially participated. Lane’s modified adjusted gross income was $165,000. What amount of the real estate rental activity loss was deductible?(Becker CPA Review Course) 8. (TCO G) Bob, who is single, has $90,000 of salary, $25,000 of income from a limited partnership, and a $30,000 passive loss from a real estate rental activity in which he actively participates. His modified adjusted gross income is $90,000. Of the $30,000 loss, how much is deductible? 9. (TCO F) Jen owns a sole proprietorship, and Steve is the sole shareholder of a C (regular) corporation. Each business sustained a $14,000 operating loss and a $3,000 capital loss for the year. Evaluate how these losses will affect the taxable income of the two owners? 10. (TCO G) Briefly (1) define and (2) discuss the purpose and impact of each of the following: a. net operating loss b. at-risk rules c. tax shelter
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