Please help with the following multiple choice questions (attached)

1) Lopez Corporation sold equipment that it had purchased for $300,000 ($100,000 cash and a note for $200,000) four years ago. As of the date of sale, Lopez had claimed $187,500 in accumulated depreciation on this equipment and had made $50,000 in principal payments on the note. Lopez received $80,000 cash and a note for $100,000 in addition to the purchaser assuming Lopez's $150,000 note on the equipment. How much of Lopez Corporation's realized gain on the sale will be a net Section 1231 gain? Select one: a. $142,500 b. $187,500 c. $212,500 d. $300,000 2) Jerry and Matt decide to form a business. Jerry will contribute $4,200 for a 35% interest and Matt will contribute $7,800 for a 65% interest. The business will take out a $25,000 loan to cover the balance of their working capital needs. They expect that the business will have a loss of $38,000 for the first year. In the second year, the business will have a profit of $52,000 and it will distribute $5,200 to Matt and $2,800 to Jerry. Jerry is in the 33% marginal tax bracket and Matt is in the 28% marginal tax bracket. Their marginal tax brackets will not change as a result of profit or loss from this business. What is Jerry's stock basis at the end of the second year if they organize the business as an S corporation? Select one: a. $6,300 b. $15,050 c. $15,400 d. $27,950 e. $0 3) In 2015, Amber earned a salary of $230,000 and also had the following items of investment income: $28,000 net short-term capital gain on sale of stock, $8,000 dividend income, $6,000 interest income from corporate bonds, and $5,000 interest income from tax-exempt municipal bonds. Compute Amber's net investment income (NII) tax if the tax rate is 3.8% and the threshold is $200,000. Click here for 2016 Medicare surtax rate/threshold table. Select one: a. $2,926 b. $1,596 c. $2,736 d. $1,786 4) Lopez Corporation has income per books before tax of $323,000. In computing income per books, Lopez deducted $20,000 for meals and entertainment expenses, $3,000 for premiums on officers' life insurance policies (the corporation is the beneficiary for these policies), and $100 for fines. What is Lopez Corporation's taxable income? Select one: a. $340,100 b. $336,100 c. $333,100 d. $323,100 5) Jared owns 50% of an S corporation's stock. His basis in the stock was $50,000 on January 1, 2014. On February 1, 2014, the S corporation borrowed $30,000 from Jared, signing a formal note. The S corporation reported an ordinary loss of $150,000 at the end of 2014 and ordinary income of $20,000 at the end of 2015. What are Jared's bases in his stock and his note at the end of both 2014 and 2015? Select one: a. At the end of 2014, his stock basis is zero and note basis is $5,000; at the end of 2015, his stock basis is zero and his note basis is $30,000 b. At the end of 2014, his stock basis is zero and note basis is $30,000; at the end of 2015, his stock basis is $10,000 and his note basis is $30,000 c. At the end of 2014, his stock basis is zero and note basis is $5,000; at the end of 2015, his stock basis is zero and his note basis is $15,000 d. At the end of 2014, his stock basis is zero and note basis is $30,000; at the end of 2015, his stock basis is $10,000 and his note basis is $15,000 6) Sebastian (age 46) and Kaitlin (age 45) are married and file a joint tax return. Their 2015 adjusted gross income is $390,000 and includes $2,600 in investment income ($2,000 in short-term capital gains and $600 of interest income). They provided 100% of the support for their daughter, Olivia, age 26,who lives with them, and earned $4,700 from her part-time job. They also provided 100 percent of the support for Sebastian's mother, Emily, who is 67, blind, and lives in a nursing home. Emily received $4,000 in Social Security benefits and $450 of interest income. Sebastian and Kaitlin also paid the following amounts in 2015: $38,500 interest on their home mortgage (acquisition debt) on their principal residence purchased in 1995. The principal amount of the mortgage is $1,250,000. They also paid $11,000 in real estate taxes on the home. $6,250 interest on a home equity loan (principal amount of $125,000) on their home. They spent $50,000 of the loan proceeds for remodeling their kitchen, $30,000 on a European vacation, and $45,000 for a new car. $6,000 investment interest expense $7,600 unreimbursed employee business expenses (none for meal or entertainment expenses) $4,700 in state income taxes to the state of California where Sebastian worked for part of the year $1,800 in state and local general sales taxes $490 fee for preparation of their 2014 tax return, paid to their CPA in 2015 $2,500 contributed to the State University Athletic Booster Club (to allow them to purchase tickets in good seat locations for football games) and $1,000 contributed to the State University Business School Alumni Association for academic scholarships. They also donated a painting (purchased 11 years ago for $4,200) to the Salvation Army, which was then sold for it fair market value of $17,000 at its fundraising auction. How much can Sebastian and Kaitlin deduct for miscellaneous itemized expenses for 2015? Select one: a. $7,800 b. $290 c. $8,090 d. 0 7) Meg was the beneficiary of a $50,000 life insurance policy when her father died at the end of 2014. The insurance company gives her the option of taking the $50,000 as a lump sum immediately or receiving an annuity of $8,000 per year for 12 years beginning in 2015. Meg takes the annuity option. What amount must Meg include in her income in 2015? Select one: a. $3,833 b. 0 c. $3,000 d. $8,000