ACC 307 Final Exam Part 2
This final exam consist of 15 multiple choice questions and covers the material in Chapters 12 through 14. There are five questions from each chapter.
1. An employer calculates the amount of income tax withheld from salary or wages based on the information an employee provides on the following form:
2. Black Company paid wages of $180,000, of which $40,000 was qualified wages for the work opportunity tax credit under the general rules. Black Company’s deduction for wages for the year is:
3. Several years ago, Tom purchased a structure for $300,000 that was originally placed in service in 1929. Three and one-half years ago he incurred qualifying rehabilitation expenditures of $600,000. In the current year, Tom sold the property in a taxable transaction. Calculate the amount of the recapture of the tax credit for rehabilitation expenditures.
4. In terms of the withholding procedures, which statement does not reflect current rules?
5. The ceiling amount and percentage for 2013 for the Medicare portion of the self-employment tax are:
6. If the taxpayer qualifies under § 1033 (nonrecognition of gain from an involuntary conversion), makes the appropriate election, and the amount reinvested in replacement property is less than the amount realized, realized gain is:
7. Mary sells her personal use automobile for $20,000. She purchased the car two years ago for $17,000. What is Mary’s recognized gain or loss? It increased in value due to its excellent mileage, yet safe design.
8. Neal and his wife Faye reside in Texas, a community property state. Their community property consists of real estate (adjusted basis of $800,000; fair market value of $6 million) and personal property (adjusted basis of $390,000; fair market value of $295,000). Neal dies first and leaves his estate to Faye. What is Faye’s basis in the property after Neal’s death?
9. Which of the following exchanges qualifies for nonrecognition treatment as a § 1031 like-kind exchange?
10. Lynn purchases a house for $52,000. She converts the property to rental property when the fair market value is $115,000. After deducting depreciation (cost recovery) expense of $1,130, she sells the house for $120,000. What is her recognized gain or loss?
11. Hiram is a computer engineer and, while unemployed, invents a switching device for computer networks. He patents the device, but does not reduce it to practice. Hiram has a zero tax basis for the patent. In consideration of $800,000 plus a $1 royalty per device sold, Hiram assigns the patent to a computer manufacturing company. Hiram assigned all substantial rights in the patent. Which of the following is correct?
12. Lynne owns depreciable residential rental real estate which has accumulated depreciation (all from straight-line) of $65,000. If Lynne sold the property, she would have a $53,000 gain. The initial characterization of the gain would be:
13. Which of the following creates potential § 1245 depreciation recapture and potential § 1231 gain?
14. A business taxpayer sells inventory for $80,000. The adjusted basis of the property is $58,000 at the time of the sale and the inventory had been held more than one year. The taxpayer has:
15. Section 1239 (relating to the sale of certain property between related taxpayers) does not apply unless the property: