ACC 401 Week 3
ACC 401 Week 3 Quiz
Real Estate for Home and Business. From Chapter 6, complete Problem 39 and Problem 43. From Chapter 7, complete Problem 49 and Problem 51. From Chapter 8, complete Problem 37 and Problem 38.
Chapter 6, complete Problem 39 and Problem 43
Income from consulting business$4,000
Consulting expenses other than home office 1,500
Total costs relating to home:
Interest and taxes 6,500
Maintenance and repairs 450
Depreciation (business part only) 1,500
Calculate Davids AGI.
a. Determine the amount of cost recovery that can be taken in 2010:_________________
b. Determine the amount of cost recovery that could be taken in 2010 if the fair market value of the property were $350,000:_____________________
Chapter 7, complete Problem 49 and Problem 51
Ricardo acquired a warehouse for business purposes on August 30, 1992. The building cost $400,000. He took $226,900 of depreciation on the building, and then sold it for $500,000 on July 1, 2010. What are the amount and nature of Ricardos gain or loss on the sale of the warehouse?
In 2010, Rosalva sold stock considered short-term for a gain of $875 and stock considered long-term for a loss of $3,400. She also had a $3,000 short-term loss carryover from 2009 and a $1,240 long-term loss carryover from 2009.
a. What amount will be shown as a short-term gain (loss) for 2010?
b. What amount will be shown as a long-term gain (loss) for 2010?
c. Will there be a carryover to 2011? If so, what are the nature and amount of the carryover?
d. Prepare a Schedule D. (Detailed stock information has been omitted; use reasonable assumptions.)
Chapter 8, complete Problem 37 and Problem 38
Property taxes 700
a. What is the proper tax treatment of this information on their tax return using the Tax Court method?
b. Is there an option for how to allocate the expense between personal and rental use? Explain.
c. What is the proper tax treatment if Matt and Marie rented the house for only 14 days?
Property taxes 800
What is the proper treatment of these expenses in each of the following cases? Use the Tax Court allocation method, if applicable.
CaseRental IncomeDays RentedPersonal Use Days
Self-Employed Business Income & Capital Gains. From Chapter 6, complete discussion question 1, question 2, question 9, and question 15 and post to the discussion board by day 3. From Chapter 7, complete question 1, question 2, question 8, and question 12.
Chapter 6, complete discussion question 1, question 2, question 9, and question 15
Discuss the definition of a trade or business. Why does it matter whether a taxpayer is classified as an employee or as self-employed?
Discuss the concepts of ordinary, necessary, and reasonable in relation to trade or business expenses.
Discuss the concept of electing 179 expense. Does the election allow a larger expense deduction in the year of asset acquisition?
Why were the hobby loss rules established? What factors determine whether an activity is a trade or business or a hobby? Is any one factor controlling?
Chapter 7, complete question 1, question 2, question 8, and question 12
How are the terms basis, adjusted basis, and fair market value defined as they apply to the calculation of gains and losses?
What is meant by the terms realized gain (loss) and recognized gain (loss) as they apply to the sale of assets by a taxpayer?
What are the different classifications of capital assets? Define each classification and explain the difference in the preferential tax treatment (the rate at which the gains are taxed).
How is a net capital loss treated? Include in your answer a discussion of how a net capital loss is treated in relation to other income.
Rental Property & Royalties. From Chapter 8 complete problem 33, problem 34, and problem 35 and post to the discussion board by day 3.
Ramone is a tax attorney and he also owns an office building that he rents for $8,500/month. He is responsible for paying all taxes and expenses relating to the buildings operation and maintenance. Is Ramone engaged in the trade or business of renting real estate?
Kelvin owns and lives in a duplex. He rents the other unit for $750 per month. He incurs the following expenses during the current year for the entire property:
Property taxes 2,000
Fixed light fixture in rental unit 100
Fixed dishwasher in personal unit 250
Painted entire exterior 1,300
Depreciation (entire structure) 7,000
How are the expenditures treated for tax purposes? On what tax form(s) are these amounts reported?
Real estate taxes 2,000
Mortgage interest 3,800
Repairs and Maintenance 1,300
What is Sandras net income or loss from the activity? Use the Tax Court method.
Excerpt from file: Week 3 Assignment - Real Estate for Home and Business - ACC401 Federal Income Taxes I ACC 401 Real Estate for Home and Business. From Chapter 6, complete Problem 39 and Problem 43. From Chapter 7, complete Problem 49 and Problem 51. From Chapter 8, complete Problem 37 and Problem 38. Chapter 6,
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