Liberty University BUSI 352 quiz 6 complete solutions correct answers A+ work

Liberty University BUSI 352 quiz 6 complete solutions correct answers A+ work

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Question 1 Jason has three capital transactions for the current year. Short­term capital loss of $5,000 Short­term capital gain of $3,000 Long­term capital loss of $2,000 What is the net effect on Jason’s taxes if he is in the 35% tax bracket?

Question 2 Cobalt, a calendar­year S corporation, was incorporated in 2010. The company had the following taxable income and distributions each year: Year 2010: Taxable income ($20,000); Distributions $0 Year 2011: Taxable income ($30,000); Distributions $0 Year 2012: Taxable income $150,000; Distributions $60,000 Year 2013: Taxable income $400,000; Distributions $175,000 Cobalt has a single shareholder. His original basis in the stock was $150,000. What is the shareholder’s basis at the end of 2013?

Question 3 Angie and Patrick were married on September 1 of this year. Following a honeymoon in Hawaii, Patrick died of a heart attack. Neither Angie nor Patrick had any dependents. What filing status can Angie use this year?

Question 4 Which of the following is not excluded from gross income?

Question 5 Which of the following statements is/are true? 1: LLCs offer limited liability protection to members. 2: S corporations offer limited liability protection to owners.

Question 6 Which of the following statements is/are true? 1: Partnerships offer limited liability protection to partners. 2: LLCs offer limited liability protection to members.

Question 7 Greg just received his student loan statement that indicates he paid $3,000 of interest on his student loan during the tax year. How much of the loan may he deduct?

Question 8 Which of the following statements is/are true? 1: Partnerships require registration with the state. 2: Limited partnerships require registration with the state.

Question 9 Trina gave her nephew Roy 100 shares of HLM Corporation stock that she purchased 6 months ago for $10,000. At the time of the gift, the fair market value of the stock was $12,000. Which of the following statements concerning the stock is correct?

Question 10 Which entity will meet the following requirements? 1: Flow­through entity 2: Limited liability 3: Can have foreign investors

Question 11 An S corporation has the following information for the taxable year. Net Income before the items below $90,000 Bill’s Salary ($38,000) Other Income $29,000 Other Expenses ($14,000) Net Income $67,000 Bill is a 20 percent owner of the S corporation and he performs services for the business as an employee. What is Bill’s self­employment income?

Question 12 Isaac is a middle school teacher with gross income this year of $35,000. Based on the following, what is Isaac’s adjusted gross income? 1: $4,000 qualified education interest expense 2: $2,000 alimony received 3: $1,000 contribution to a traditional IRA 4: $750 in educator expenses

Question 13 An architect performed services for Bill and Sue and, in lieu of her normal fee, accepted a 10% interest in a partnership with a fair market value of $10,000. How much income from this arrangement should the architect report on her income tax return?

Question 14 Aurora had the following cash inflows during the current taxable year. 1: Wages: $45,000 2: Loan Proceeds: $2,000 3: Child Support: $5,000 4: Stock Sale Proceeds: $3,000 5: U.S. Government Bond Interest: $1,000 What is her gross income for income tax purposes if her adjusted tax basis in the stock was $2,000?

Question 15 Which of the following statements is true regarding refundable tax credits?

Cobalt, a calendar-year S corporation, was incorporated in 2010. The company had the following taxable income and distributions each year:
Year 2010: Taxable income ($20,000); Distributions $0
Year 2011: Taxable income ($30,000); Distributions $0
Year 2012: Taxable income $150,000; Distributions $60,000
Year 2013: Taxable income $400,000; Distributions $175,000
Cobalt has a single shareholder. His original basis in the stock was $150,000. What is the shareholder's basis at the end of 2013?

Which type of entity could possibly file any of the following forms?
1: Form 1040
2: Form 1065
3: Form 1120S

Arturo, a consultant, uses the cash method of accounting for his business. Arturo recently provided consulting services to his best customer Sergio. When should Arturo recognize income from this service?

Which entity will meet the following requirements?
1: Disregarded entity
2: Limited liability
3: Self-employment tax on all income

Under which of the following circumstances must a taxpayer itemize his deductions?
1: When the taxpayer has been married for less than one year
2: When the taxpayer is married and files a separate return and the taxpayer's spouse itemizes his or her deductions
3: When the taxpayer is a nonresident alien

Angie and Patrick were married on September 1 of this year. Following a honeymoon in Hawaii, Patrick died of a heart attack. Neither Angie nor Patrick had any dependents. What filing status can Angie use this year?

Which of the following can file as a corporation or partnership?

An architect performed services for Bill and Sue and, in lieu of her normal fee, accepted a 10% interest in a partnership with a fair market value of $10,000. How much income from this arrangement should the architect report on her income tax return?

Which of the following is not an available filing status?

Aurora had the following cash inflows during the current taxable year.
1: Wages: $45,000
2: Loan Proceeds: $2,000
3: Child Support: $5,000
4: Stock Sale Proceeds: $3,000
5: U.S. Government Bond Interest: $1,000
What is her gross income for income tax purposes if her adjusted tax basis in the stock was $2,000?

An S corporation has the following information for the taxable year. 
Net Income before the items below $90,000
Bill's Salary ($38,000)
Other Income $29,000
Other Expenses ($14,000)
Net Income $67,000
Bill is a 20 percent owner of the S corporation and he performs services for the business as an employee. What is Bill's self-employment income?

Which of the following is not excluded from gross income?

Which entity will meet the following requirements?
1: Availability of preferred returns for certain investors
2: Considers loans from third parties in basis of owners
3: Limited liability

At the beginning of the current year, Donna's basis in her partnership interest was $100,000. At the end of the year, Donna received a K-1 from the partnership that showed the following information.
Cash Withdrawn $31,000
Partnership Taxable Income $60,000
Charitable Contribution $1,000
What is Donna's basis in her partnership interest at year-end?

Excess distributed income over reasonable compensation:
1: is treated as self-employment income in a LLC.
2: is treated as dividend income in a S corporation.

Which of the following is not an itemized deduction from adjusted gross income?

Sam's Turbo Repair, Inc. (STR) purchased a new machine for cleaning and retooling the turbo blades on semi-trucks. The machine cost was $30,000, 10% sales tax, and $1,000 delivery and setup fee. What is STR's basis in the new machine?

Contributions to charity are limited to a certain percentage of income. How long is the carry-over period for individuals to use any excess current charitable deduction?

Isaac is a middle school teacher with gross income this year of $35,000. Based on the following, what is Isaac's adjusted gross income?
1: $4,000 qualified education interest expense
2: $2,000 alimony received
3: $1,000 contribution to a traditional IRA
4: $750 in educator expenses

Kim and Warren are both 67 years old and healthy. They are filing their tax return and want to know how many personal exemptions they may take. You correctly inform them that they can take

An architect performed services for Bill and Sue and, in lieu of her normal fee, accepted a 10% interest in a partnership with a fair market value of $10,000. How much income from this arrangement should the architect report on her income tax return

Which of the following statements is true regarding refundable tax credits

On August 1, 2008, Jack bought a 5 percent interest (5 shares) in XYZ, an S corporation that files as a calendar-year taxpayer. In 2008, the S corporation income was $160,000. How much will be reported to Jack on his 1120S K-1?

At the beginning of the current year, Donna’s basis in her partnership interest was $100,000. At the end of the year, Donna received a K-1 from the partnership that showed the following information: Cash Withdrawn $31,000 Partnership Taxable Income $60,000 Charitable Contribution $1,000 What is Donna’s basis in her partnership interest at year-end?

Which of the following statements is/are true? 1. It is necessary to register with the state when forming a proprietorship. 2. It is necessary to register with the state when forming a partnership.

Which entity does not have all of the following characteristics? 1. Limited liability. 2. Ability to distribute in-kind appreciated assets to owners without gain recognition. 3. Can have foreign investors

Which type of entity could possibly file any of the following forms? 1. Can file Form 1040. 2. Can file Form 1065. 3. Can file Form 1120S

Which entity will meet the following requirements? 1. Unlimited number of owners. 2. Limited liability. 3. Self-employment tax on all income.

Which of the following can file as a corporation or partnership? a. LLC and LLP. b. LLC only. c. LLP only. d. LLC and S corporation