Question 1 3.5 pts Perry owns all of the stock of Sound Corporation. Perry is also the president of Sound and works full-time in running it. During the current year, Sound has a loss of $75,000 from its operations. I. If Sound is an S Corporation, Perry deducts the loss on his personal tax return as a deduction for AGI if his amount at risk is $65,000. II. If Sound is a regular corporation, the corporation can carry the loss forward indefinitely to reduce taxable income in future years. Only statement II is correct. Only statement I is correct. None of the statements are correct. Both statements are correct. Question 2 3.5 pts Greg pays a sales tax of $7.20 on the purchase of a lamp for $120. Michelle pays a sales tax of $9 on the purchase of a similar lamp for $150. Greg's taxable income for the current year is $40,000. Michelle's taxable income is $55,000 1. The structure of the sales tax is proportional if it is based on taxable income. II. The structure of the sales tax is progressive if it is based on sales price. None of the statements are correct. Only statement Il is correct. Both statements are correct. Only statement is correct. Question 3 3.5 pts A passive activity: 1. includes an interest in a limited partnership held by a limited partner. II. includes a working as an employee. None of the two statements are correct. Only statement I is correct. Both statements are correct. Only statement II is correct. Question 4 3.5 pts Marci is single, and her adjusted gross income is $30,000. In addition, she pays the following expenses during the current tax year: Psychiatrist's fees $800 Hospital bill for medical services and room 1.800 Prescription drugs 770 Over-the-counter vitamins 200 Chiropractor's fees 700 Marci pays $600 for medical insurance premiums and receives a reimbursement of $1,000 from the insurance company for her medical expenses. Compute her allowable medical deduction after the AGI limitation for the current tax year. $2,700 $900 $4,150 $1,420 Question 5 3.5 pts Linda owns three passive activities that had the following income and loss for the current year: Passive Activity A $(4,500) Passive Activity B 20.000 Passive Activity C (25,500) If none of the passive activities are rental real estate activities, what is the amount of suspended loss attributable to Activity A? $4,500 O $1,500 $-0- $8.500 $10,000 Question 1 3.5 pts Perry owns all of the stock of Sound Corporation. Perry is also the president of Sound and works full-time in running it. During the current year, Sound has a loss of $75,000 from its operations. I. If Sound is an S Corporation, Perry deducts the loss on his personal tax return as a deduction for AGI if his amount at risk is $65,000. II. If Sound is a regular corporation, the corporation can carry the loss forward indefinitely to reduce taxable income in future years. Only statement II is correct. Only statement I is correct. None of the statements are correct. Both statements are correct. Question 2 3.5 pts Greg pays a sales tax of $7.20 on the purchase of a lamp for $120. Michelle pays a sales tax of $9 on the purchase of a similar lamp for $150. Greg's taxable income for the current year is $40,000. Michelle's taxable income is $55,000 1. The structure of the sales tax is proportional if it is based on taxable income. II. The structure of the sales tax is progressive if it is based on sales price. None of the statements are correct. Only statement Il is correct. Both statements are correct. Only statement is correct. Question 3 3.5 pts A passive activity: 1. includes an interest in a limited partnership held by a limited partner. II. includes a working as an employee. None of the two statements are correct. Only statement I is correct. Both statements are correct. Only statement II is correct. Question 4 3.5 pts Marci is single, and her adjusted gross income is $30,000. In addition, she pays the following expenses during the current tax year: Psychiatrist's fees $800 Hospital bill for medical services and room 1.800 Prescription drugs 770 Over-the-counter vitamins 200 Chiropractor's fees 700 Marci pays $600 for medical insurance premiums and receives a reimbursement of $1,000 from the insurance company for her medical expenses. Compute her allowable medical deduction after the AGI limitation for the current tax year. $2,700 $900 $4,150 $1,420 Question 5 3.5 pts Linda owns three passive activities that had the following income and loss for the current year: Passive Activity A $(4,500) Passive Activity B 20.000 Passive Activity C (25,500) If none of the passive activities are rental real estate activities, what is the amount of suspended loss attributable to Activity A? $4,500 O $1,500 $-0- $8.500 $10,000
