CPA REG Practice Test 2

Kyle purchased stock on 1/1/Year 1. The stock had a fair market value of $15,000 on that date. He purchased it from his son for $12,000. His son had a basis in the stock of $17,000 at the time of sale. On 6/31/ Year 1, Kyle sold the stock to an unrelated party for $20,000.

Which of the following assets would be considered a MACRS 5-year property?

1. Computer
2. Computer Desk
3. Office Furniture
4. Delivery Van

Bob and Sue have been married for 35 years. Bob inherited $3,000,000 from his dad. Assuming the annual gift tax exclusion is $15,000, what amount can Bob give Sue without incurring a gift tax liability?

In year 3, John moved from Boston to Chicago for a new job position. He incurred moving expenses of $3,000 and $2,500 in temporary living expenses. The company did no reimburse John for any of the expenses. What amount can be deducted as an itemized deduction for moving expenses?

True or False: Subpart F income paid to a US person is a 100% dividend received deduction?

Shawn and Lindsay met on December 31, Year 2 at New Years Eve party. They instantly fell in love and got married at 11:38 PM. What is Shawn’s filing status for year 2?

Drew owns two residences. The second residence has never been used as a rental property and the only residence subject to a mortgage. The following expenses were incurred for the second residence in the current year:

For regular tax purposes, what is the maximum allowable amount that Drew can deduct from his second residence?

Which of the following options would release someone from the obligation to pay a loan that they co-signed? Assume Lola is the co-signer and Jess is the signer.

Joe, a real estate broker has the following income and expense items for the current year:

What amount should Joe report on as net profit on the schedule C, Profit and Loss from Business?

Hogan Inc. operates in Michigan and Utah. The payroll, property, and sales by state are as follows:

What is Hogan’s apportionment factor for Michigan?