A Mahmoud, Mustafa MM AutoSave CH H2O ACC-1302 Exam # 1 Fall 2021.docx - Compatibility Mode - Word Search File Home Insert Design Layout References Mailings Review View Help FOXIT PDF Share Comments 1 X out [B Copy Format Painter Find Replace Select Paste Dictate Sensitivity Editor Reuse Files Clipboard Font Styles Ecrting Voice Sensitivity Editor Rouse Files - Times New Romar 14 A A A A E E AL > ALI | . BIUX, X ADA OF 1 Normal 1 No Spac... Heading 1 Heading 2 Title Paragraph I ...1......2...1.3............................ 13 1. Tern Corporation, a cash basis taxpayer, has taxable income of $500,000 for the current year. Tern elected $25,000 of $ 179 expense. It also had a related-party loss of $20.000 and a realized (not recognized) gain from an involuntary conversion of $75,000. It paid Federal income tax of $150,000 and paid a nondeductible fine of $10,000. Tern's current E & Pis: a. $415.000 b. $350,000 c. $340,000 d. $320,000 2. Tracy and Jerome, equal shareholders in Macaw Corporation, receive $600,000 each in distributions on December 31 of the current year. Macaw's current-year taxable income is $1,000,000 and it has no accumulated E & P. Last year, Macaw sold an appreciated asset for $1,200,000 (basis of $400.000). Payment for one-half of the sale of the asset was made this year. How much of Tracy's distribution will be taxed as a dividend? a. $0 b. $300.000 c. $500.000 d. $600,000 3. In 2021, Sam and Betty, cach single, both generate sole proprictor income of $240,000. Sam's income is generated from a wholesale business whereas Betty's is earned from her law practice. Neither has any employees or qualified assets. Both claim the standard deduction and have other income equal to the standard deduction amount a. Both Sam and Betty will have a QBI deduction of $48,000. b. Sam can obtain a QBI deduction, but Betty cannot because of the taxable income level and law practice is a specified service business. c. Neither Sam nor Betty will generate a QBI deduction due to their taxable income levels. d. None of these Page 1 of 1 1030 words English (United States) Focus EL 00% Type here to search OBI H 0 33C A'O ENG 11:10 PM 9/11/2021