Claudia wants to donate a portrait of an ancestor who served in the American Revolution to the museum in her town that houses a collection of Revolution Era items. Her basis in the portrait is $1,750, and it has a fair market value of $2,000. How much can she potentially deduct as a charitable contribution this year, assuming it is her only donation?

1) None, because it is the portrait of a relative

2) $600 (the museum is a 30% organization, so she must use FMV)

3)$1,750 (it is related-use capital gain property, so she must use basis)

4) $2,000 (it is related-use capital gain property)

Claudia's father, Ralph, has been in an assisted living facility for the last 30 months. Prior to that, he lived at the home he shared with his spouse, Louise. Louise still lives in the home but will be moving to the assisted living facility to join her husband soon. She has asked Claudia to sell their small home, which has increased in FMV because of extensive development in their neighborhood. They paid $40,000 for the home 50 years ago and have been greatly surprised to receive an offer of $325,000 from a developer interested in the land. Because Ralph hasn't been living in the home recently, they are resigned to paying tax on the sale. How much of the gain on the sale of the home is taxable to Claudia's parents?

1) $0

2) $35,000

3) $250,000

4) $285,000

What is the approximate net loss/gain that the Taylors will report regarding their rental real estate on Schedule E for 2019? (Assume mortgage interest of $12,594 in 2019.)

1) $6,394 loss

2)$1,406 gain

3) $4,394 loss

4)$6,200 gain

Assume that in 2019 Bobby had a vacant lot that was given to him as a gift from his father that had an FMV of $40,000 and an adjusted basis of $15,000. His friend Mike has a larger lot to dispose of that has an FMV of $85,000 and an adjusted basis of $50,000. Mike exchanged it for the smaller lot and $45,000 cash. Bobby thinks this is a good deal. Calculate the recognized gain for Bobby.

1) $0

2) $10,000

3) $25,000

4)$50,000

What amount of the payments to Susan can Bobby and Claudia deduct as alimony on their 2019 federal income tax return?

1) $0

2)36,000

3) $6,000

4)$7,200

Assume that in 2019 Bobby had a vacant lot that was given to him as a gift from his father that had an FMV of $40,000 and an adjusted basis of $15,000. His friend Mike had a larger lot to dispose of that had an FMV of $85,000 and an adjusted basis of $50,000. Mike exchanged it for the smaller lot and $45,000 cash. Bobby thinks this is a good deal. Calculate the realized gain for Bobby.

1)$0

2) $10,000

3)$25,000

4) $50,000

Susan's parents have gifted the children, Bill and Alice, various investments. Alice has investment income of $4,000 in 2019 and earned $1,000 babysitting. Bill's investments did not perform as well; he only earned $2,000, but his part-time job in Bobby's jewelry store paid him $6,000. Susan provides more than 50% of each child's support. Given their earnings, can Susan still list both children as dependents on her tax return this year?

1)No, she can claim Alice, but Bill is too old and earned too much money.

2)Yes, it doesn't matter whether she provided 50% of their support because they are under age 19.

3)No, she may not claim either child, but Bobby can.

4)Yes, both children meet the requirement of a qualifying child under IRS regulations.

If Claudia were to sell the bond portfolio today for the value shown on the Statement of Financial Position, what would be the taxable gain?

1) $0

2) $27,000

3) $32,000

4)$64,000

Alice had investment income of $4,000 last year (2018) and earned $1,000 babysitting. How much of Alice's income will be taxed at her individual tax rate?

1) $1,350

2) $1,750

3) $1,900

4)$3,650

What is Claudia's adjusted basis in the art collection?

1) $8,200

2) $10,000

3)$16,150

4) $40,000