1. (1/2 point) Cooper has the following items of income and loss during the year. What is Cooper's taxable capital gain or deductible capital loss for the year? Include its character. Dollar amount and character. 2. (1/2 point) Athena gave you the following information about the current tax year and asked you to find her adjusted gross income: Dollar amount. 3. (2 points) Ezekiel has the following items of income. What is the dollar amount and character of the capital gains/losses he used in this tax year? What is the carryover amount and character? Note that you can have two amounts used (for example, a STCG and a LTCG), and you could have two amounts carried over (for example, a STCL and a LTCL). This is an exercise in netting and keeping your "buckets" in order. Dollar amount(s) and character(s) of the amount used. Dollar amount(s) and character(s) of carryover. 4. (1 point) Melody has a daycare business that she runs out of her home. This year she purchased a new bedroom set for the master bedroom - a place where she doesn't allow children - and a new playground for use in the business. Which of these is a capital asset? Item(s) considered capital asset(s). 5. (2 points) a. Jason bought an antique rug at an auction in 2015 for $12,000. He used it in his personal residence. In the current tax year, he sold the rug for $18,000. What are the tax implications (i.e., is anything taxable? If so, how is it characterized)? Amount taxable or deductible and character. b. Jason bought an antique rug at an auction in 2015 for $12,000. He used it in his personal residence. In the current tax year, he sold the rug for $10,000. What are the tax implications (i.e., is anything taxable? If so, how is it characterized)? Amount taxable or deductible and character. 6. (9 points) Joe operates a business that locates and purchases specialized assets for clients. among other activities. Joe uses the accrual accounting method, but he doesn't keep any significant inventories of the specialized assets that he sells. Joe reported the following financial information for his business activities during the current year. Determine the effect of each of the following transactions on the taxable business income for the current year only. Amount taxable or deductible and character. (9 points) Joe operates a business that locates and purchases specialized assets for clients, among other activities. Joe uses the accrual accounting method, but he doesn't keep any significant inventories of the specialized assets that he sells. Joe reported the following financial information for his business activities during the current year. Determine the effect of each of the following transactions on the taxable business income for the current year only. a) Joe has signed a contract to sell gadgets to the city. The contract provides that sales of gadgets are dependent upon a test sample of gadgets operating successfully. In December of the current tax year, Joe delivers $12,000 worth of gadgets to the city that will be tested and accepted or rejected in March. Joe purchased the gadgets specifically for this contract and paid $8,500. Amount taxable or deductible. b) Joe paid $180 for entertaining a visiting out-of-town client. During the entertainment, they spent most of the time discussing business, resulting in a new contract for Joe. Amount taxable or deductible. c) On October 1 , Joe paid $600 for premiums providing for $40,000 of "key man" insurance on the life of Joe's accountant over the next 12 months. Amount taxable or deductible. d) Two tax years ago, loe had included $2,800 of taxable income from John Smith, which was an accounts receivable at that time. Last tax year, Joe took a bad debt deduction of $2,800 because John filed bankruptcy without making any payments. This tax year, the bankruptcy court made a final distribution to Joe of $400. Amount taxable or deductible. e) In December of the previous tax year, Joe rented equipment to complete a large job. Joe paid $3,000 in December because the rental agency required a minimum rental of three months ($1,000 per month). Joe completed the job before the yearend, but he returned the equipment at the end of the lease in the current tax year. Amount taxable or deductible. f) Joe hired a new sales representative employee and sent her to Dallas for a week to contact prospective out-of-state clients. Joe reimbursed his employee $700 for the actual airfare cost, $450 for the actual lodging cost, and $250 for meals in restaurants. Amount taxable or deductible. g) Joe uses his BMW (a personal auto) to travel to and from his residence to his factory. However, he switches to a business vehicle if he needs to travel after he reaches the factory. Last month, the business vehicle broke down, and he was forced to use the BMW to travel to and from the factory and visit work sites. He drove 2,890 miles visiting worksites during the first half of the year and 1,900 miles driving between the factory and his home. In the second half of the year, he drove 2,914 miles visiting worksites during the first half of the year and 1,850 miles driving g) Joe uses his BMW (a personal auto) to travel to and from his residence to his factory. However, he switches to a business vehicle if he needs to travel after he reaches the factory. Last month, the business vehicle broke down, and he was forced to use the BMW to travel to and from the factory and visit work sites. He drove 2,890 miles visiting worksites during the first half of the year and 1,900 miles driving between the factory and his home. In the second half of the year, he drove 2.914 miles visiting worksites during the first half of the year and 1,850 miles driving between the factory and his home.loe uses the standard mileage rate to determine his auto-related business expenses. Amount taxable or deductible (to the nearest dollar). h) Joe paid a visit to his parents in Dallas over the Memorial Day weekend. While in Dallas, he attended a symposium related to his business. This trip had the following costs: Amount taxable or deductible. i) Joe attended a conference in Ft. Worth in July that lasted four days. He stayed at his sister's house. While in Ft. Worth, he incurred the following costs: Amount taxable or deductible: 1. (1/2 point) Cooper has the following items of income and loss during the year. What is Cooper's taxable capital gain or deductible capital loss for the year? Include its character. Dollar amount and character. 2. (1/2 point) Athena gave you the following information about the current tax year and asked you to find her adjusted gross income: Dollar amount. 3. (2 points) Ezekiel has the following items of income. What is the dollar amount and character of the capital gains/losses he used in this tax year? What is the carryover amount and character? Note that you can have two amounts used (for example, a STCG and a LTCG), and you could have two amounts carried over (for example, a STCL and a LTCL). This is an exercise in netting and keeping your "buckets" in order. Dollar amount(s) and character(s) of the amount used. Dollar amount(s) and character(s) of carryover. 4. (1 point) Melody has a daycare business that she runs out of her home. This year she purchased a new bedroom set for the master bedroom - a place where she doesn't allow children - and a new playground for use in the business. Which of these is a capital asset? Item(s) considered capital asset(s). 5. (2 points) a. Jason bought an antique rug at an auction in 2015 for $12,000. He used it in his personal residence. In the current tax year, he sold the rug for $18,000. What are the tax implications (i.e., is anything taxable? If so, how is it characterized)? Amount taxable or deductible and character. b. Jason bought an antique rug at an auction in 2015 for $12,000. He used it in his personal residence. In the current tax year, he sold the rug for $10,000. What are the tax implications (i.e., is anything taxable? If so, how is it characterized)? Amount taxable or deductible and character. 6. (9 points) Joe operates a business that locates and purchases specialized assets for clients. among other activities. Joe uses the accrual accounting method, but he doesn't keep any significant inventories of the specialized assets that he sells. Joe reported the following financial information for his business activities during the current year. Determine the effect of each of the following transactions on the taxable business income for the current year only. Amount taxable or deductible and character. (9 points) Joe operates a business that locates and purchases specialized assets for clients, among other activities. Joe uses the accrual accounting method, but he doesn't keep any significant inventories of the specialized assets that he sells. Joe reported the following financial information for his business activities during the current year. Determine the effect of each of the following transactions on the taxable business income for the current year only. a) Joe has signed a contract to sell gadgets to the city. The contract provides that sales of gadgets are dependent upon a test sample of gadgets operating successfully. In December of the current tax year, Joe delivers $12,000 worth of gadgets to the city that will be tested and accepted or rejected in March. Joe purchased the gadgets specifically for this contract and paid $8,500. Amount taxable or deductible. b) Joe paid $180 for entertaining a visiting out-of-town client. During the entertainment, they spent most of the time discussing business, resulting in a new contract for Joe. Amount taxable or deductible. c) On October 1 , Joe paid $600 for premiums providing for $40,000 of "key man" insurance on the life of Joe's accountant over the next 12 months. Amount taxable or deductible. d) Two tax years ago, loe had included $2,800 of taxable income from John Smith, which was an accounts receivable at that time. Last tax year, Joe took a bad debt deduction of $2,800 because John filed bankruptcy without making any payments. This tax year, the bankruptcy court made a final distribution to Joe of $400. Amount taxable or deductible. e) In December of the previous tax year, Joe rented equipment to complete a large job. Joe paid $3,000 in December because the rental agency required a minimum rental of three months ($1,000 per month). Joe completed the job before the yearend, but he returned the equipment at the end of the lease in the current tax year. Amount taxable or deductible. f) Joe hired a new sales representative employee and sent her to Dallas for a week to contact prospective out-of-state clients. Joe reimbursed his employee $700 for the actual airfare cost, $450 for the actual lodging cost, and $250 for meals in restaurants. Amount taxable or deductible. g) Joe uses his BMW (a personal auto) to travel to and from his residence to his factory. However, he switches to a business vehicle if he needs to travel after he reaches the factory. Last month, the business vehicle broke down, and he was forced to use the BMW to travel to and from the factory and visit work sites. He drove 2,890 miles visiting worksites during the first half of the year and 1,900 miles driving between the factory and his home. In the second half of the year, he drove 2,914 miles visiting worksites during the first half of the year and 1,850 miles driving g) Joe uses his BMW (a personal auto) to travel to and from his residence to his factory. However, he switches to a business vehicle if he needs to travel after he reaches the factory. Last month, the business vehicle broke down, and he was forced to use the BMW to travel to and from the factory and visit work sites. He drove 2,890 miles visiting worksites during the first half of the year and 1,900 miles driving between the factory and his home. In the second half of the year, he drove 2.914 miles visiting worksites during the first half of the year and 1,850 miles driving between the factory and his home.loe uses the standard mileage rate to determine his auto-related business expenses. Amount taxable or deductible (to the nearest dollar). h) Joe paid a visit to his parents in Dallas over the Memorial Day weekend. While in Dallas, he attended a symposium related to his business. This trip had the following costs: Amount taxable or deductible. i) Joe attended a conference in Ft. Worth in July that lasted four days. He stayed at his sister's house. While in Ft. Worth, he incurred the following costs: Amount taxable or deductible