I need help with the very last couple questions letter E, F, and G of the final question. Need in 1 hour! PLEASE

Accounting 333 - Spring 2016 Test #4 /100 Name __Kelsey Schafer________ 1) Gena exchanges land held as an investment with a $60,000 basis for other land with a $80,000 FMV and a motorcycle with a $10,000 FMV. The acquired land is to be held for investment and the motorcycle is for personal use. What is the amount of recognized gain? (5) Realized Gain = $30,000 Recognized Gain = $10,000 (80,000 + 10,000 - 60,000) (10,000 boot received is less than realized gain) 2) Pamela owns land for investment purposes. The land is worth $300,000 (basis of $260,000 to Pamela). Pamela exchanges the land, plus $20,000 cash, for a warehouse to be used in her business. The FMV of the warehouse is $400,000, but the warehouse is subject to a mortgage of $80,000, which is assumed by Pamela. Pamela must recognize a gain of? (5) Recognized Gain = $0 (land for the warehouse is a like-kind exchange and she received not boot to recognize gain.) 3) Glen owns a building that is used in business. The building is worth $200,000, but is subject to a mortgage of $40,000. Glen's basis in the building is $120,000. Glen exchanges the building for investment land worth $150,000 plus $10,000 cash. In addition, the other party assumes the mortgage which will be held for investment. Glen must recognize a gain of? (10) Realized Gain = $80,000 Recognized Gain = $50,000 (150,000 + 10,000 + 40,000 - 120,000) (Boot = 10,000 cash and 40,000 liability assumed) 4) Laurie owns land held for investment. The land's FMV is $150,000. Laurie's basis in the land is $130,000. Laurie exchanges the land, plus $20,000 of cash, for a warehouse owned by Trey. The warehouse is worth $210,000, but is subject to a mortgage of $40,000 which Laurie will assume. Trey's basis in the warehouse is $120,000. Laurie's basis in the warehouse received will be? (5) Unrecognized Gain = $20,000 (210,000 - 40,000 - 20,000 -130,000) Basis in warehouse = $190,000 (210,000 - 20,000) 5) Stephanie's building, which was used in her business, was destroyed in a fire. Stephanie's adjusted basis in the building was $175,000, and its FMV was $210,000. Stephanie filed an insurance claim and was reimbursed $200,000. In that same year, Stephanie invested $180,000 of the insurance proceeds in another business building. If the proper election is made, Stephanie will recognize gain of? What is her basis in the new building?? (15) Realized Gain = $25,000 Recognized Gain = $20,000 (200,000 - 175,000) (200,000 - 180,000) (lesser between realized gain and gain from insurance proceeds not reinvested) Basis in new building = $175,000 (180,000 - (25,000 - 20,000)) 6) Pierce has a $16,000 Section 1231 loss, a $12,000 Section 1231 gain, and a salary of $50,000. What is the treatment of these items in Pierce's AGI? (5) The Sec. 1231 gains and losses are treated as ordinary gains and losses, and Pierce's AGI is $46,000 (50,000 + 12,000 - 16,000) 7) A corporation owns many acres of timber, which it acquired three years ago, and which has a $120,000 basis. The timber was cut last year for use in the corporation's business. The FMV of the timber on the first day of last year was $270,000. The corporation made the appropriate election to treat the cutting as a sale or exchange. The timber is sold for $300,000 this year. The tax result this year is? (5) Last year's 1231 Gain = $150,000 (270,000 - 120,000) Gain on sale = $30,000 (300,000 - 270,000) This year tax result = Recognition of ordinary income (gain) of $30,000 8) During the current year, Hugo sells equipment for $150,000. The equipment cost $175,000 when placed in service two years ago, and $55,000 of depreciation deductions were allowed. The results of the sale are (how much gain and what rate is it taxed at)? (5) Equipment's adj. balance = $120,000 (175,000 - 55,000) 1231 Gain realized = $30,000 (150,000 - 120,000) 1245 ordinary income (gain) to extent of depreciation = $30,000 9) A corporation sold a warehouse during the current year. The straight-line depreciation method was used. Information about the building is presented below: Date acquired 1984 Cost $800,000 Accumulated Depreciation - Straight-line 620,000 Selling Price 890,000 How much gain should the corporation report as section 1231 gain? (10) Adjusted Basis = $180,000 (800,000 - 620,000) Tent. 1231 Gain = $710,000 (890,000 - 180,000) 1245 Recapture = $620,000 291 Recap of 1245 Recap = $124,000 (620,000 x 20%) Section 1231 Gain = $586,000 (710,000 - 124,000) 10) Reva and Josh Lewis had alternative minimum taxable income of $350,000 in 2015 and file a joint return. For purposes of computing the alternative minimum tax, their exemption is (5)? AMT Base = $191,100 Reduction = $47,775 Exemption = $35,625 (350,000 - 158,900) (191,000 x 25%) (83,400 - 47,775) 11) Lavonne has a regular tax liability of $13,294 on taxable income of $70,000. She also has tax preferences of $25,000 and positive adjustments attributable to limitations on itemized deductions of $15,000. Lavonne is single and takes a $4,000 personal exemption for herself only. Lavonne's alternative minimum tax for 2015 is? (10) AMTI = $114,000 Min Tax Base = $60,400 Tent. Min. Tax = $15,704 Alternative minimum tax = $2,410 (70,000 + 25,000 + 15,000 + 4,000) (114,000 - 53,600) (60,400 x 26%) (15,704 - 13,294) 12) John has $55,000 net earnings from a sole proprietorship. John is also employed part-time by a major corporation and is paid $25,000. John's self-employment tax (rounded) for 2015 is (5) SE Net Earnings = $50,793 SE Tax (rounded) = $7,771 (55,000 x .9235) (50,793 x 15.3%) (SS and Med) 13) Max and Alexandra are married and incur $5,500 of qualifying expenses to care for their two children, ages 2 and 5. Max's earned income is $35,000 and Alexandra's earnings from a parttime job are $5,000. What is the amount of the qualifying expenses for purposes of computing the child and dependent care credit? (5) Amount of qualifying expenses = $5,000 (Earned Income Limitation) 14) Timothy and Alice, who are married with modified AGI of $90,000, are sending their daughter to her first year of college. Their total tuition and related payments during the year amounted to $13,000. In addition, their daughter received a $10,000 scholarship to cover tuition. They have not taken advantage of any other type of tax benefit related to educational expenses. Their American Opportunity Tax Credit is? (5) Tuition = $3,000(13,000 - 10,000) AOTC = $2,250 [(2,000 x 100%) + (1,000 x 25%)] 15) In the fall of 2015, James went back to school to earn a master of accountancy degree. He incurred $7,000 of qualified educational expenses and his modified AGI for the year was $40,000. His Lifetime Learning Credit is? (5) LLC = $1,400 (7,000 x 20%) Dan and Jane are married and have 2 children, Andrea (18) and Frank (12). Andrea qualifies as a dependent and has no income for the year. Dan works for the post office and earns $52,000 this year. He has $6,000 withheld from his paycheck. Jane was a housewife up until the current year, when she started selling Avon from her house to help make ends meet. They also have a rental unit they purchased 1/1/05 for $130,000. They have interest income of $75, and also had the following security transactions for the current year: Date Bought 6/1/15 7/8/03 1/1/15 3/15/06 5/8/03 12/31/07 Date Sold 12/1/15 9/18/15 6/5/15 8/1/15 6/15/15 12/31/15 Basis 5,000 3,000 8,000 6,000 10,000 6,000 Sold For 2,000 4,000 6,000 3,000 5,000 9,000 Dan and Jane bought a 3,000 square foot house on 12/1/12. Jane has a 50 square foot office that she uses exclusively for her Avon company, including holding parties where her customers can come and try the products before purchasing them. Her expenses in connection with the office were as follows: Supplies Phone (own line) Utilities (whole house) Insurance (whole house) Interest & Property Taxes $3,000 200 4,000 [(4000 x (50/3000)] = 66.67 700 [(700 x (50/3000)] = 11.67 6,000 Jane also had the following expenses in conjunction with the business: Miles Driven Entertainment Meals Income Quarterly Payments 3,268 600 1,000 21,000 250 x 4 payments = 1,000 The following relates to the rental property: Income Utilities Water Insurance Taxes 10,000 1,200 700 600 2,000 They also had the following expenditures: Fed Income Taxes Paid 2,000 Medical Expenses 13,000 State Income Taxes W/H 1,800 Taxes on House 4,000 Interest on House 2,000 Charitable Contributions 500 A) Compute Business Income and Tax for Jane (10) Business Income Expenses: Administrative Supplies 21,000 3,000 Phone Utilities Insurance Interest Operating Income Miles Entertainment Meals Quarterly Payment Charitable Contributions Total Business Income Business Income Tax (15%) 200 66.67 11.67 6,000 [(4000 x (50/3000)] [(700 x (50/3000)] (9278.34) 3,268 600 1,000 1,000 (5,868) (500) $5,353.66 $803.05 B) Compute Income for Rental Property (10) Income Expenses: Utilities 1,200 Water 700 Insurance 600 Tax 2,000 Income from Rental Property 10,000 (6,500) $3,500 C) Figure Capital Gains/Losses and any carryforward if necessary (10) Capital Gains/Losses Short-Term Loss on 12/1/15 Loss on 6/5/15 Total Long-Term Profit on 9/18/15 Profit on 12/31/15 Loss on 8/1/15 Loss on 6/15/15 Total Total Capital Loss (3,000) (2,000) (5,000) 1,000 3,000 (3,000) (5,000) (4,000) $(9,000) D) Find AGI (10) Salary Income Amt. Withheld Net Business Income Rental Income 52,000 (6,000) 46,000 5,353.66 3,500 Capital Loss Other Income AGI (9,000) 75 $45,928.66 E) What is the Amount of Itemized Deductions? (15) F) What is the Total Amount of FROM AGI Deductions? (5) G) Compute Tax Liability and Net Tax Due or Refund (Don't Forget Credits)