6. Juan owns vacant land that serves as security for a $60,000 mortgage. Juan is personally liable for the mortgage. His basis in the land is $20,000 and the fair market value is $50,000. The bank foreclosed on the property in 2019. What are the tax consequences to Juan? a) Juan recognizes income in the amount of his discharge of indebtedness: $60,000 b) Juan has a gain on the transfer and must recognize income of $40,000 c) Juan has $40,000 of income; a gain of $30,000 on the transfer and $10,000 as a discharge of indebtedness d) Both (a) and (b) e) None of the above 7. Bob Brown's aunt Barbara gave him a house. At the time of the gift, the house had a fair market value of $194,000. His aunt's adjusted basis was $74,000. There was no gift tax liability. What is Bob's basis in the house for purposes of determining gain? a) $0 b) $74,000 c) $94,000 d) $180,000 e) $194,000 8. Charles, a single 29-year-old, deferred 2% of his salary, or $2,000, into a 401k retirement plan sponsored by his employer during 2019. What is the maximum deductible IRA contribution Charles can make during 2019? a) $0 b) $1,000 c) $4,000 d) $5,500 e) $6,500 9. Traditional IRA participants who are still working after age 70 %: a) Must begin payout from their accounts at age 59% b) Must begin payouts from their accounts on the day on which they turn 70 % c) May defer payouts from their accounts until the end of the year in which they retire d) May defer payouts from their accounts until April 1 following the year they reach age 70 % e) May defer payouts from their accounts until April 1 of the year they retire 10. Seth, a CPA, provides free accounting services to the local Boys Town. It is a domestic organization and recognizes 501(c)(3) public charity. Seth normally bills his time at $450/hour. Over the course of the year Seth spent 150 hours working on the organization's books. Seth is single and his AGI is $100,000. Assuming he itemizes his deductions on Schedule A, the time volunteered valued at $67,500) will result in a charitable deduction of: a) $0 b) $25,000; the balance will be carried over to another year c) $50,000; the balance will be carried over to another year d) $67,500 6. Juan owns vacant land that serves as security for a $60,000 mortgage. Juan is personally liable for the mortgage. His basis in the land is $20,000 and the fair market value is $50,000. The bank foreclosed on the property in 2019. What are the tax consequences to Juan? a) Juan recognizes income in the amount of his discharge of indebtedness: $60,000 b) Juan has a gain on the transfer and must recognize income of $40,000 c) Juan has $40,000 of income; a gain of $30,000 on the transfer and $10,000 as a discharge of indebtedness d) Both (a) and (b) e) None of the above 7. Bob Brown's aunt Barbara gave him a house. At the time of the gift, the house had a fair market value of $194,000. His aunt's adjusted basis was $74,000. There was no gift tax liability. What is Bob's basis in the house for purposes of determining gain? a) $0 b) $74,000 c) $94,000 d) $180,000 e) $194,000 8. Charles, a single 29-year-old, deferred 2% of his salary, or $2,000, into a 401k retirement plan sponsored by his employer during 2019. What is the maximum deductible IRA contribution Charles can make during 2019? a) $0 b) $1,000 c) $4,000 d) $5,500 e) $6,500 9. Traditional IRA participants who are still working after age 70 %: a) Must begin payout from their accounts at age 59% b) Must begin payouts from their accounts on the day on which they turn 70 % c) May defer payouts from their accounts until the end of the year in which they retire d) May defer payouts from their accounts until April 1 following the year they reach age 70 % e) May defer payouts from their accounts until April 1 of the year they retire 10. Seth, a CPA, provides free accounting services to the local Boys Town. It is a domestic organization and recognizes 501(c)(3) public charity. Seth normally bills his time at $450/hour. Over the course of the year Seth spent 150 hours working on the organization's books. Seth is single and his AGI is $100,000. Assuming he itemizes his deductions on Schedule A, the time volunteered valued at $67,500) will result in a charitable deduction of: a) $0 b) $25,000; the balance will be carried over to another year c) $50,000; the balance will be carried over to another year d) $67,500