ACC 401 Week 2
ACC 401 Week 2 Quiz
Deductions. From Chapter 4, complete problem 53 and problem 55. From Chapter 5, complete problem 54, problem 61, and problem 62 and submit to your instructor.
Chapter 4, complete problem 53 and problem 55
53. Under the terms of a divorce decree executed May 1, 2010, Rob transferred a house worth \$650,000 to his ex-wife, Linda, and was to make alimony payments of \$3,000 per month. The property has a tax basis to Rob of \$300,000.
a. How much of this must be reported on Lindas tax return?
b. Of that amount, how much is taxable gain or loss that Linda must recognize related to the transfer of the house?
55. Indicate whether each of the following items is considered a for AGI, (above-the line) deduction for the 2010 tax year.
a. Student loan interest.
b. Gambling losses.
c. Early withdrawal penalty.
d. Child support payments.
e. Charitable contributions.
f. One-half of self-employment taxes.
h. Scholarships for tuition and books.
i. Moving expenses.
j. Property taxes.
k. Self-employed health insurance premiums.
Chapter 5, complete problem 54, problem 61, and problem 62
54. Steve purchased a personal residence from Adam. To sell the residence, Adam agreed to pay $4,500 in points related to Steves mortgage. Discuss the tax consequences from the perspective of both Steve and Adam.
61. Reynaldo and Sonya, a married couple, had flood damage in their home due to a faulty water heater during 2010, which ruined the furniture in their garage. The following items were completely destroyed and not salvageable.
Their homeowners insurance policy had a \$10,000 deductible for the personal property, which was deducted from their insurance reimbursement of \$12,700, resulting in a net payment of \$2,700. Their AGI for 2010 was \$30,000. What is the amount of casualty loss that Reynaldo and Sonya can claim on their joint return for 2010?
62. During the year 2010, Ricki, who is not self-employed and does not receive employer reimbursement for business expenses, drove her car 5,000 miles to visit clients, 10,000 miles to get to her office, and 500 miles to attend business-related seminars. She spent \$300 for airfare to another business seminar and \$200 for parking at her office. Using the car expense rate of 50 cents per mile, what is her deductible transportation expense?
Adjusted Gross Income. From Chapter 4, complete problem 43, problem 48, and problem 52.
43. What are some of the limitations concerning deductibility of student loan interest? Be specific and comprehensive.
48. In May 2010, Maria graduated from the University of San Diego with a degree in accounting and moved to Denver to look for work. Shortly after arriving in Denver, she obtained work as a staff accountant in a local CPA firm. In her move to Denver, Maria incurred the following costs:
$450 in gasoline.
$250 for renting a truck from UPAYME rentals.
$100 for a tow trailer for her car.
$85 in food.
$35 in double lattes from Starbucks.
$300 for motel lodging on the way to Denver.
$350 for a previous plane trip to Denver to look for an apartment.
$175 in temporary storage costs for her collection of antique bassoons.
How much, if any, may Maria take as a moving expense deduction on her 2010 tax return? Is that deduction subject to any conditions that could change its deductibility in the future?
52. Three types of payments are associated with a decree of separation or a divorce
a. What are those three payments?
b. Which one has a tax consequence?
c. What is the timing rule regarding the recapture period of those payments?
Itemized Deductions. From Chapter 5, complete problem 48, problem 52, and problem 53.
48. Mickey is a 12-year-old dialysis patient. Three times a week he and his mother, Sue, drive 20 miles one way to Mickeys dialysis clinic. On the way home they go 10 miles out of their way to stop at Mickeys favorite restaurant. Their total round trip is 50 miles per day. How many of those miles, if any, can Sue use to calculate an itemized deduction for transportation? Use the medical mileage rate in effect for 2010. Explain your answer.
52. On April 1, 2010, Paul sold a house to Amy. The property tax on the house, which is based on a calendar year, was due September 1, 2010. Amy paid the full amount of property tax of $2,500. Calculate both Pauls and Amys allowable deductions for the property tax. Assume a 365 day year.
53. In 2009, Sherri, a single filing taxpayer, had \$3,600 in state tax withheld from her paycheck. She properly deducted that amount on her 2009 tax return as an itemized deduction that she qualified for, thus reducing her tax liability. After filing her 2009 tax return, Sherri discovered that she had overpaid her state tax by \$316. She received her refund in July 2010. What must Sherri do with the $316 refund? Explain your answer.
Excerpt from file: Week 2 DQ 1 - Adjusted Gross Income - ACC401 Federal Income Taxes I ACC 401 Adjusted Gross Income. From Chapter 4, complete problem 43, problem 48, and problem 52. 43. What are some of the limitations concerning deductibility of student loan interest? Be specific and comprehensive. Answer: An
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