1. On July 1, 2014, a taxpayer leases a car for 24 months. The terms of the lease require the taxpayer to pay $1,000 a month. Based on the value of the automobile, the inclusion amounts for years 1 through 3 are $313, $590, and $602, respectively. If the taxpayer uses the car 60% of the time for business, what amount should be deducted as lease expense on Schedule C in 2014?

Question 1 options:

1)

$3,412

2)

$3,505

3)

$5,843

4)

$3,287

5)

$5,687

2. On June 25, 20X1, a taxpayer places in service 5-year listed property that cost $10,000. The taxpayer uses the property 65% for business during 20X1 and depreciates the property using regular (accelerated) MACRS. No Section 179 or bonus depreciation was taken on the property. During 20X2, the taxpayer's business usage drops to 40%. The taxpayer's depreciation expense for the property in 20X2 is:

Question 2 options:

1)

$2,000.

2)

$1,300.

3)

$2,080.

4)

$800.

5)

$3,200.

3. Years ago, Frank purchased stock in ABC company for $23,000. Last year, Frank sold the stock to his daughter, Deb, for $12,000 (its current market value). Deb later sells the shares for $15,000. Deb's adjusted basis in the stock and her recognized gain or loss on the sale are:

Question 3 options:

1)	$12,000 adjusted basis, $0 recognized gain

2)	$23,000 adjusted basis,$0 recognized gain

3)	$23,000adjusted basis,$3,000 recognized gain

4)	$12,000adjusted basis,$3,000 recognized gain

5)	$12,000adjusted basis,$8,000 recognized loss

4. On November 18, 2014, equipment is stolen from ABC manufacturing. ABC purchased the equipment for $100,000 and its adjusted basis is $0. The insurance company paid ABC $20,000 for its loss on January 6, 2015. How long does ABC have to purchase qualified replacement property and how much must it reinvest to avoid recognizing its gain?

Question 4 options:

1)	December 31, 2017 and $20,000, respectively.

2)	December 31, 2015 and $20,000, respectively.

3)	December 31, 2016 and $100,000, respectively.

4)	December 31, 2015 and $100,000, respectively.

5)	None of the above.

5. A taxpayer sold land for $80,000. It originally cost $60,000. Selling expenses were $4,000. The proceeds are to be collected in installments over a four-year period. The taxpayer received $30,000, plus interest, in the current year. Under the installment method of reporting income, how much gain should be recognized in the current year?

Question 5 options:

1)

$4,000

2)

$5,000

3)

$6,000

4)

$16,000

5)

$20,000