Acct 553 Final Exam

ACCT 553 Final Exam

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Question

1. (TCO E) Interest, dividends, and annuities income are classified as _____. (Points : 5)

active income

passive income

portfolio income

None of the above

2. (TCO D) Tom Tanner traded in a printing press with an adjusted basis of $20,000 for a smaller press valued at $12,000. In addition to the smaller press, Tom received $3,000 in cash and was relieved of the existing liability of $5,000 on the old press. What is Tom's recognized gain? (Points : 5)

$0

$3,000

$4,800

$5,000

3. (TCO H) Bob and Susan file a joint return for the 2010 tax year. Their adjusted gross income is $80,000. They had a net investment income of $9,000. In 2010, they had the following interest expenses.

Personal credit card interest: $5,000

Home mortgage interest: $10,000

Investment interest (on loans used to buy stocks): $10,000

What is the interest deduction for Bob and Susan for the 2010 tax year? (Points : 5)

$19,000

$8,000

$16,000

$25,000

4. (TCO B) Bob and Cindy Smith paid the following medical expenses during the year (all in excess of reimbursement).

Hospital and doctor bills: $800

Medicine and drugs: $700

Hospitalization insurance premiums: $6,000

Medicine and drugs (for dependent mother, age 71): $1,000

Assuming that the Smiths' adjusted gross income was $60,000, how much of a medical expense deduction may Bob and Cindy claim on their joint return? (Points : 5)

$8,170

$4,000

$4,330

$8,500

5. (TCO A) ***** *****, a cash-basis, calendar-year taxpayer, paid the following during the year.

Social security tax (withheld from wages): $4,500

Real estate taxes: $3,200

State incometax: $3,400

Special assessment for installation of sidewalks: $1,140

Penalty on tax underpayment: $300

Flat fee for automobile...