Part 2 - Case Study 2

Case Study 2 Click the link below to access the PDF document with details needed to complete the second return. After you have made the required entries, return to the test and answer questions about this tax return. Case Study Save Your Work! It is recommended that you SAVE the work you have done so far on this test before accessing BlockWorks. If you fail to do so and you are automatically timed out of the test, you will lose your work and have to start over. After entering the required information, you should either save a copy of the completed return or keep the shell return open while you answer the questions.

Question 68 of 75.

Choose the answer that correctly describes a reason why Irene is required to file Form 8594, Asset Acquisition Statement Under Section 1060.

The buyer is an S corporation.

The form is used to calculate and report Irene's total gain from the sale of her business assets.

The form is used to calculate and report the amount of ordinary income Irene realized from the sale of depreciable property.

The total sales price the buyer agreed to pay was over and above the fair market value of all the identifiable, tangible assets they acquired.

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Question 69 of 75.

What amount will Irene need to pay for self-employment tax?

$3,861

$4,214

$5,698

$6,263

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Question 70 of 75.

What is the amount of Irene's net long-term capital gain?

$10,500

$12,150

$13,000

$30,000

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Question 71 of 75.

The case study states that an amount for goodwill was included in the sales contract. How is this amount reported on the tax return?

As income in Part I of Schedule C.

As a long-term capital gain on Form 8949 and Schedule D.

As a gain from the sale or exchange of property in Parts I and III of Form 4797.

As an ordinary gain from the disposition of property in Parts II and III of Form 4797.

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Question 72 of 75.

What is the amount reported for gross receipts or sales in Part 1 of Irene's Schedule C?

$88,300

$90,800

$105,300

$107,800

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Question 73 of 75.

What is the amount of Irene's qualified business income deduction?

$2,989

$3,454

$6,149

$6,614

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Question 74 of 75.

The furniture and fixtures that Irene sold are classified as what type of business property?

Section 1245.

Section 1250.

Section 1252.

Section 1255.

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Question 75 of 75.

What is the total amount of additional income reported on Irene's Schedule 1, Additional Income and Adjustments to Income?

$29,826

$46,826

$48,476

$57,326