ACC 401 Week 3 Quiz (Ashford)
- What is the basis of artistic works that have been gifted to another by the creator?
- Mario owns a home in Park City, Utah, that he rented for $1,600 for three weeks during the summer. He lived there for a total of 120 days and the rest of the year, the house was vacant. The expenses for the home included $6,000 in mortgage interest, $900 in property taxes, $1,300 in maintenance and utilities, and $3,500 in depreciation. How much net rental income or loss from the Park City home would Mario report for the current year? Use the IRS method for allocating expenses.
- If an activity is considered a hobby, which of the following is true?
- Hugh and Mary own a cabin in Big Bear that they rented for 45 days at $4,500. They used the cabin for personal use for 30 days during the year. The allocated expenses related to the cabin of $6,000, resulting in a net loss of $1,500 for this rental activity. What is the proper tax treatment of these amounts by Hugh and Mary?
- Francisco sells a parcel of land for $90,000 cash and the buyer also assumes Francisco's liability of $10,000. The basis of his land is $60,000. What is the gain or loss realized on the sale?
- Which of the following is incorrect regarding luxury automobile limitations?
- May owns a four-plex in Garden Grove, CA. She rents out 3 units and lives in the fourth. Her income and expenses for the entire four-plex are as follows: mortgage interest $8,200, property taxes $9,000, insurance $3,000, utilities $2,000, repairs and maintenance $1,000, depreciation on the entire complex of $5,000, and rental income of $25,000. What amount of net rental income or loss should May report on her current tax return?
- If inventory is a material amount, what method of accounting is acceptable for a sole proprietorship to use?
- Which of the following properties is not eligible for the §179 expense election when purchased?
- Georgia owns a home in Colorado that she rents for $1,200 per month (she does not use the home personally). While she was in Europe in November, the roof in her rental home leaked and her tenant repaired it for $900. For the following month's rent (December), her tenant paid her $300 for rent ($1,200 - $900). What amounts should Georgia include for rental income and repair expense, respectively, for December?