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Name: __________________________ Date: _____________ UMUC - ACCT 323 - Due April 16, 2017 This exam is to be completed without the assistance of any other person. You may use only the resources provided by your instructor for this class. ** Save this file and include your name in the file name: Basket_Days_Final You may create a Word File for your work. Please verify that each page prints out formatted with your name and page number on the page. Excel files should show gridlines. At a minimum, use print preview so you can see how the work will print out. I pledge on my honor that I have not given or received any unauthorized assistance on this examination. In addition, I pledge that I will not disclose to, or discuss the contents of this examination with, students who have not taken it. _________________________________________________________________________ Signed Final exam - Spring 2017 (Feb-Apr) - Answer all questions: - 12 short answers Name ___________________________________________ Date ____________ Good Luck!!!!!! 1) Geier textbook - Chapter 1 - page 26 - Problem 7. Answer the question about Lindsey's office building. What amount of loss can Lindsey deduct? 00028733.DOCX - Page 1 of -- 2) Geier textbook - Chapter 4 - Page 129 - Answer the bolded questions - Rhonda owns a tugboat, and the tugboat manufacturer recommends inspection and cleaning of the engine every 3 years, with replacement of worn parts, as necessary. In year 3, Rhonda pays for the scheduled maintenance, which includes cleaning, inspecting, reconditioning, and the replacement of minor parts. Must she capitalize the cost? In year 6, when the next scheduled maintenance occurs, Rhonda decides to upgrade the engines to increase the horsepower and propulsion, thus allowing her to pull heavier loads. The amount that she pays includes the replacement of some parts with upgraded components to achieve the increased power that she desires but also the usual cleaning, inspecting, reconditioning, and replacement of minor parts which benefits the upgrades. Must she capitalize? 3) Geier textbook - Chapter 3 - Figure 6 on page 76. Explain the information in this chart in layman's term (to someone who is not familiar with tax/ economics/government). Limit your explanation to 100 words. 4) Geier text - Chapter 5 - page 151 - Problem 9 - Conglomerate Inc., has a cafeteria in its headquarters that is open to all employees. The cafeteria charges a low price (substantially less than the FMV of the meals) in order to just break even in running the cafeteria. Must the employees include the difference between the FMV of the meals and the price paid for them in taxable income? Why or why not? 00028733.DOCX - Page 2 of -- 5) You filed your 2014 tax return on July 1, 2015 after getting an extension. After you file, you realize that you failed to report 25% of your taxable income. How do you amend? How long do you have to amend (consider Statute of Limitation)? Consider the materiality of the over/underreporting - and the related penalties and interest. 6) A common source of tension between divorced parents is agreeing on who will claim the children as dependents on their returns going forward. The rules can become complicated, but provide two of the main criteria that should be considered in who gets the dependency exemptions. A. B. 7) Briefly explain the difference between the capital gains tax rate (qualified dividends and long term capital gains) and the ordinary tax rate on wages, interest, etc. 8) Briefly explain the rules for taking a tax deduction for office in the home. What expenses can be deducted? How is the calculation made for the room(s) that are used for business? 00028733.DOCX - Page 3 of -- 9) A friend of yours recently began a hair restoration procedure. The full cost of the procedure is $16,000. Your friend wants to know if this procedure can be taken as a medical deduction. Discuss circumstances where it may be tax deductible. 10) Many taxpayers make charitable donations in cash. Some make non-cash donations. The most common example of non-cash donations is clothing and household goods to Goodwill, Inc. But imagine that you are fortunate enough to be able to give publicly traded stock to a charity. How is the charitable donation of the stock valued for tax purchases? 11) Salaried taxpayers are on a pay-as-you-go system in regard to paying federal and state taxes. Taxes are withheld from each payroll check. For taxpayers who are not salaried, but have income from dividends, interest, capital gains, self-employment, rental income, etc., what are the requirements for these taxpayers to pay their taxes? Discuss the estimated tax payment requirements. 12) Geier textbook - Chapter 3 - page 113. The author lists 12 types of revenue that are excluded from taxation under current tax law. Select one of these items and make the argument that this item should be taxed or no longer excluded. Imagine you are in a discussion group with your Congressperson and looking for ways to raise revenue for the federal government. 00028733.DOCX - Page 4 of