For bonds issued 2018, the taxpayer must amortize bond premium using which of the following methods? OA. Straight-Line Method OB. Constant Yield Method C. Activity Depreciation Method D. Double Declining Balance Frank Johnson owned and operated an apple orchard. He used the cash method of accounting. He sold and delivere bushels of apples to a canning factory for $2,000, but did not receive payment before his death. The proceeds from the sale are income in respect of a decedent. When the estate was settled, payment had not been made and the estate transferred the right to the payment to his widow. Also, the income was not reported on the final return of the decedent or on the return of the estate. When Frank's widow collects the $2,000, she must include what amount in her income tax return? O A. $0 OB. $500 O C. $1,000o O D. $2,000 The Tax Cuts and Jobs Act (TCJA) does not change the IRC Section 67(e) deductions estates and trusts may take in connection with expenses for the administration of a trust or estate that would not have been incurred if the property were not held as such. These deductions include all of the following except: OA. Trustee commissions OB. Attorney fees O C. Rollover distributions O D. Appraisals Rudolph dies in 2018, having made taxable gifts of $3 million during his lifetime and having no taxable estate. An election is made on Rudolph's estate tax return to permit Deborah, his wife to Rudolph's deceased spousal unused exclusion amount. As of Rudolph's death, Deborah has made no taxable gifts. Therefore, Deborah's applicable exclusion amount, which she may use for lifetime gifts or for transfers at death is what amount? B. $8,180,000 C. $11,180,000 D. $19,360,000 Jack Sage used the cash method of accounting. At the time of his death, he was entitied to receive $12,000 from clients for his services and he had accrued bond interest of $8,000, for a total income in respect of a decedent of $20,000. He also owed $5,000 for business expenses for which his estate is liable. The income and expenses are reported on Jack's estate tax return. The tax on Jack's estate is $9,460, after credits. The net value of the items included as income in respect of the decedent is $15,000 ($20,000 $5,000). The estate tax determined without including the $15,000 in the taxable estate is $4,840, after credits. The estate tax that qualifies for the deduction is what amount? B. $4,620 OC. $4,840 OD. $9,460 Under the Tax Cuts and Jobs Act miscellaneous deductions which exceed 2% of the taxpayer's adjusted gross income (AGI) will be eliminated. This includes deductions for all of the following except: O A, Unreimbursed employee expenses OB. Gambling expenses to the extent of gambling winnings C. Home office expenses O D. Tax preparation expenses Mary suffers $25,000 in uninsured losses in 2018 when her house burns down while she was on vacation. This loss was not due to a Federally declared disaster, therefore Mary can deduct what amount of the casualty losses relating to her home on her Federal income tax return? OB. $10,000 O c. $12,500 O D. $25,000 During 2018 Royce has an adjusted gross income (AGI) of $40,000. What is the maximum amount Royce can deduct for charitable contributions of money or property he made to qualified organizations if he itemizes his deductions? OA. $0 B. $10,000 O c. $20,000 D. $24,000 Cuts and Jobs Act provides that for tax years beginning after December 31, 2017 until January 1, 2026, state, The Tax local, and foreign property taxes, and state and local sales taxes, are fully deductible only when paid or accrued in carrying on a trade or business or an activity relating to expenses for the production of income. Therefore, taxpayers may only fully claim deductions for state, local and foreign property taxes, and sales taxes that are presently deductible in comput income on all of the following schedules except: OA. Schedule A B. Schedule C O C. Schedule E D. Schedule F Amanda and Steve Smith are married and file jointly. During 2018 they paid state property taxes of $15,000 and state income taxes of $2,000. If they decided to itemize their deductions what amount of combined property and state income taxes can Amanda and Steve claim on their Schedule A - Itemized Deductions? A. $2,000 B. $10,000 C. $15,000 D. $17,000
