Question Number Two Thirty-eight multiple choice exercises/problems appear below. You must answer alt of them. For each problem you answer, insert the letter which incicates the correct answer. in the appropriate space on the separate answer sheet. A1 final answers have been rounded to the nearest $10. 1. Spouses Bill and getty Baker, aber 7s and 69 , maintain and reside in a heme in which Betty's mother, Berths, also lives. Bertha is age 92 and blind with zero gross income Bif and Betty provide 160% of Bertha's support. What standard deduction will Bal and betry claim on their 2021 joint federal incone tax return? ABCoENoneoftheabove527,80025,100=29,15030,500 2. Thomas Tuylor, who was injared in an automoble accident caused by another delver, Fiash Fisher, received $20,000 trom flash's insurance company to cover medical bills related to Thomas' injuries, $4,000 in damages becauve of the injury, and $15,000 in in punitive darases, all during 2021 . Thomas alio earhed $10,000 from a part-time job prior to the accident, received 5900 of United States series ef savings band interest, and collected 52,000 in workman's compensation from an unrelated injury sulfered while working at the part-time job, also all during 2021 . What is Thomas' adjusted gross income for the year? AACDENoneoftheabove$27,00025,90025,00010,900 3. In 2021, Russell Rogers is single with net investment incore of $18.000 and modi fied adjusted gross intome of $270,000, What is the aroont of hisireil's net investment income tax for the year? AsCDE52,6600680760Noneoftheabove 4, On May 1. 2021, Madje Mays \{cash basia) leases srosetty she cand to Tomuth Thompsor for rent of 51,000 per manth. On May 1, 2021. Torny pays Masate $2,000 as damage deposit which wil be reluraed at the end of the letse term. lit adsione, on May 1,2021 . Tommy pays Mazsle $6,000 as advance rent which is to be appigd ep rent for the last air months of the lease term. The lease rums for a one year period berinning on May 1 . 2021 . What is Magtie's paythents to Mahale during 2021, \begin{tabular}{rr} A & 512,000 \\ \& & 8,000 \\ E & 14,000 \\ E & 6,000 \\ \hline & Nane of the abcove \end{tabular} 5. Married couple inhn und Mary Mawon Neve separated. Mrry supported their two chile ren after the separation and paid 100 si of the eost of malntainify the horte in shich the children lived atter I Shn moved nut in September, 2021. The purties remain married as of December 31; 2021. Iohn fefuses to fe a joint retwer foe a04t. Which atatement is: true regarding Mary's finire status on 2724 Form 1042t A. Mary may claim abandoned spouse firing status II Mary inay Pie as a head of toorehicid C. Mary nuust file as inarried separate D. Many maysill file a joint returnt, thereby foreine koks to abo fle joindy E. None of the above available to fichard for 2021 ? A.B.C.D.I.None-oftheabove$520,0000500,00020,000 C Gain of \$4.000 E None of the above 8. Taxpeyer, Tanya Tanner; who was diworced on lanary 2,2020 , tas a so0, 3Ge 15, wing in her horne for the entire year of 2021 . The cont :o muinita Tanyary home was S 1 2,000 for 2021. Tanyz growided $8000 of that co9. The remain 5$5000 in previded by Tanya's ex-spouse, Thomas Tanner Tenya claims her so as a dependent. What is the most advantagedusfiling status for which Tanye rmay quiltr ton het aop 1 form 10.90? A sirgle 8. Mamied filing separate C. Head of hoursehold 0. Surviving spouse E. Some other availabie fiting status 9. Ianet Jones, ane 29, single and blind, attendis vCu fur time satkine a desree and aupports hersedi, During 2021, lanct earns alary of 523,500 , receives interet incone of 52,000,3 and a scholarshig from VCU in the amount of 56000 , of wrich ss ob0 so wpefied to VCU tultion and 51.000 5o the cost of required tentbocici. Assum that lanet has available 2021 iteinized dedoetions of 516,000 . Compate janet't taxabie incente for 2021. AB.CDE.Noneoftheabove$4,65012,45010,7509,000 10. Eifectlve Jaraary. 2,2017 , Andrew Arnoid purchased an annuitr for 5110,000, the terms of which pecride for paymeots to him of 515,250 anfulfy for twe we vears. Hica much, if any. of the 515.250 received in 2021 wit Andrew feport an sross income an his 2021 Form 1050? A0CDI$9,1705,0805,25011,000Noneoftheabove 11. Judith jones, sinsle, reports four wales of caplaf atsetr earing 20nt, as ser out below. Faxpayer's only other income for the year is salary of 530000 . What is Ju tish's. adjusted bross income for the year? ABcDENoneoftheabove580,00073,00086,00070,000 12. Fajaiyer, Donna Dawson, on her 2021 federal income tau return correctly elaims her son as a dependent. Assume that the son earris 57.000 in 2021 mowing lawes whille away froen hame attending colese and that the son fet a 2021 Form foso. What personal exemption dedjuction ambunt may the son chim on his 2021 Form 1040? AsCDt$4,20001,0004,300Noneoftheabore 13. Faxpayer acquired a personat use aset two years afo at a coit of $1,000. 5 ix month ago the taxpayer expended $400 to extend the aset's verful ife and siso make it more productive. One yoar ister, when the asset has a tair murket value of $900, Taxpayer converts the machine to bualness use. For deprecation purposes, at what basis amount will the astet convert to buainess use? ASCDINoneoftheabove1,4001,0009000 14. Norris Noble is tingle with 3021 Medicare wases or 5140,000 and net self ermployment incor of $100000. What is the total amotint of Nomr' adscional Medicare tax for the year? A&CDENoneoftheabove$1.5203600900 15. Albert Able is a former resident of Richmond, Virsta, bst han ived in Ofio tor the past three yeark. Albert is 100 supported by the three ineividuals listed below. all of wham reside in Richmond. Under a multiple suspart apreement, who would be eleble to doim atbert. depenslent? dependent? A Feakin only E. Crueles only C Patrick only. - Franklin or Patrick E Nane of the above 16. On Ausust 4; 2021, calendar yeaf taxpyer Ben Baiarasqures and places in gervice in his sole proprietorshipa mschine at a cost of Srapect. Asw-e that the machine has a aseful life of 15 year and a salyake walot of 510000 . Assume also that the machine is a Mucps 7 yesr asset, that Eas doen net ciaim ar 1RC 179 deduction of benus depreciation, and that Ben purchases no other depresirble assets during the year, What depecciation deduction win genciain ca Ris 2023 \{third year\} Form 1040, Sthedule C? ABCDE$10,4903,50010,7205,750Naneoftheabove 17. Soan 3ohnson is narried to norresient alien who fles federal income rax retums using a lane 30 fiscal year. Joan provides fow of the cert of maintaining householis in which a qualfying ching of joen resides for all twehe monthe ch calendaryear 2.921. Assuming that joan secks to incur the fawest porsible income tax fasithe what 2021 Form 1040 Hiling status will loan ute? A Single E= Married joint. C Married separate D. Head of housebold E None of the absve 18. Chris Crone (age 67) is marridd, but wor tile at marrief separate Aunme lhat Chris has: one child, who ausaifies as tis dependera. Amume alw thas oras tpoute has afreaby? the return. Adume finally that Chris hay ACl of 599,000 for the year, but has only \$7,009 ef qualifying ltemized deductions and withee 00 ciam the standard deducticin for the vear. What is Chria" twrable income for 202s? ABEDE.Woneaftheabove5.38.00032,70936,70043,000 19. Srantes farley has tocal assets of 520,000 and tatal labities ol 570000 . Puriuant 10 a Title 11 bankrupecy action, all 570000 of francer debt is diew Jrged. As a fesult of the debt dischar ge. Fravies will have prott incortic of what a mount? ABCDENoneoftheabove570,00050,000020,000 20. Jean Thomas, spouse of Patrick Thomas, died on july 11, 2021. Widower, Patrick Thomas marries Anne Able be July 12, 2021. The a0n1 Form 1043 for bean Thonas will be sabmitted under what filing classinication? A Marriedfiling jointly. B. Single C. Married filing separately D Head of household E. None of the above 21. Two years ago, Corp. A purchased residential resl estate fupartment complexf at a total cost of $250,000. Of this amoant, 550,000 was allocated to the underlying land. What is the corporation's allowable decreciation dedaction for the current year? ABCDENoneoftheabove$5,0005,1305,3507,270 22. In 2021, Dan Davis, afe 85 and shicle, recelved social 5 ecuray benefits of $14,000, dividend and interest payments of $21,000 a tamabie pension of 530,000 and a taxable ilf dilstributioe of 516,000 . What is the amcunt of Oan's adjusted gross income for 2021? ABCDENoneoftheabove$80,40078,90078,39067,000 23. During 2021, Albert redeems Series EE savings boodi for $5,000 cansisting of $2,000 interest and $4,000 principat. Albert has aet quakying efocation eapensus of 55,000 in 2021 . Albert, a single individue(t reports asfusted gross income (without the sevings bond interest) of $20,000. How much map albert exclude on his 2021 Foim 1040? A $1,670 b. 1,000 b. 2,000 E None of the above 24. Louise Lewis, age 72, is married and sopports her mother, age 95 . During 2021: touise pays $1,300 for prescription medicine for ber mother, who is dimed as a depenifent, $1,000 for prestription medicine for her husand, and $3,400 foe phricias bifs for henelf. Louise's: gross income is $55,000 and her ad,asted eross ince-e is $50,000. Assuming that Louse has sufficient other deductions to itemize for 2 til., bow much medical erpense will? Will touise and her husband anftually tedust on their joint 2021 form 1040 ? ABCDENoneoftheabove$1,9505,7001,950650 25. Five year property costing $25,000 was placed in sernce on 2 a wy 11,2021 and $75,000 of tive year property was also placed in service on December 4,2021 . All property is: depreciated using MCAS. Neither INC 179 nor boeas degreciution is dained. What. will be the 2021 depreciation deduction for the $25,000 asset? A&CDENoneoftheabove$6305,0003,05012,500 26. Corp. A purchases and pays 1004 of the premium cest for afe insurance an all of its emplayees. Employee Anne Able, age S5, has a policy srovides $40,000 of coverage. Assume that Corp. A pays $240.00 actual premium cont for fane s polloy for the year: Based on the above data, Corp. A wall include what amount of additional taxable income on Anne's W-2 for the vear? ABCDENoneoftheabove$2102602400 What amount should Donia AiCDENoneoftheabove$11,1009,50013,41010,400 28. Which, it any, of the listed taxes are not allowable as an iemited dediection? A. Federal gitt tax A. Federal gasoline ewise tax C. Virginia inheritance tax D. Al are dedoctible ar *emited deductions E. None are deductible at itemized deductions. 29. Which of the nisted interest expenses can be desurted as an Memured deduction? A. Mone equaty loan interest on funds barrowed for tution for the favpayers child B. Personal credit card interest C. Points pald upon refinancing a lan st rectal property D. investanens interest on money bonrowed to puictuse puiciogal bendt If. Hone of the above may be deoutted ar a 1 tenised deaturtion 30. Which of the listed statements is carrect? the recipient shareholder of Corp. A stock. B In computing bayd for each new block of stock rectived as resut of a nontaiable dividend, it it immaterial whthint the stock recelved in iefmical of net to the old stoch not change. Will be entitied to a tax deduction for the basis dif the expired nights E. All of the lilied statements are incarrect. 31. Which of the listed individuals wil quatify as desendent or Tapayer? A. A fwenty-5ix yeaf old 1 an who earned 55.500 between lanuary 1 and March 17, but was unemgloyed for the rexainder of the year Q. A seven year old niece supported by Tangayter, bot mio Foed whit Taxpayer's pareats alliear year C The flye year old son of Taxpayer's pest frend who fived with Taipdyar all year while the child's parents were in prison D. Taxpayer's twenty-one year old married dauster who was supported by Tavgayer. but who filed a joint return With her hurbsad. Assines shat the daughter earned $14,000 of income and the joint return reported a 5430 income tax liability. E None of the above 32. Which of the tisted items would norm thy be inciaded in arress ioconte? 1. A radio quiz show vacation prize lvalue \$1. Scoi 2. A 5100 cash payment received ats an employee safety a urard 3. A new watch (value $100) recteived by an empibyte usan athainament of four years with his.plee new employer A. Hem 1 onhy B. Item 2 only C. isem 3 only D. Iten 1, irem 2, and 1tem 3 all wowld be linchuded it ross income E. None of the above answers are cerrect 33: Anne Able, age ss, spends candiderable time each year purnuing her hebby of bastball card collecting, occasionaliy atiending cand collecter thews, where she boys and sells cards. During 2021, Anne recordi gross mies of 52100 at reven showi and incurs and puys ord nary and necetisary experess of 55,2.w. 0n Anne' 2021. Form 104, she mast report . A Cross revenue of $3,100, bus cen deduct $3,100 "1ar A 52 = 8) Gross revenue of $3,100, but can deduct $5,200 for Aff1, C Gross revenue of $3,100, but ean deduct 55,200 *fom AC:* D Gross revenue of $3,100, tru can dediet rero en Fonm 1040 E. Nore of the above 34. Ben Baker purchased Aax Company atock five yeirs a9o for 59,000. Een died in 2020 at a time when the stock's mariat valie was 512000 and feft the recte in wis will to has davghter, Anne, who sold the stock in 2021 for $13.000. What must Aree repert on her 2021 . form 1040? ABCDENoneoftheabove53,000eain1,000gain4,000gain0gainorloss 15. George Grayson owns 100 shares of common stock of Corp. A. Va a nontaxable, stock distribution, George receives 20 shares of Corp. A's preferred stock. Assume that Corp. A's common stock has a market value of $20 per share and that the preferred shares received by George have a market value of 530 per share. Assuming that George has a total basis or $1.000 for the 100 shares of Corp. A common stock owned at the time of the diatribution, What will be the total basis (not basis per share) of the 20 shares of preferred stock that George receives in the distribution? ABCDE$6000770230Noreoftheabove 36. Spouses, Chip and Carrie Carson, purchased a principal residence in fuchmond for: 375,000 on October 1,2020 . Carrie obtained a job in Bostor, and on December 1 , 2021 , they sold their home in Eichmond for 5650,000 and moved to Boston. How much gain, if any must Chip and Carrie recogniae on their 2021 joint federal income tax return? A&CDE.$500,0000275,000275,000Noneoftheabove 37. Ben Baker purchased stock five years ago for $5,000 which he gave (gift) to Anne Able at a time when the stock's market value was 57,000 sebsequently. Anne sold the stock for $7,200. What will be the amount of Arne's gain or loss on the saie? ABCDE$2,000gain200gain2,200gain0gainorlossNoneoftheabove 38. Taxpayers, lwasband and wife, sold their principal residence for $900,000 in October of 2021 They had purchased it 2004 for 5200,000 and mase major captal improvements during the period of ownetship totaling $40,000. How moch canc if ant. must they recognize on theie 2021 joint Form 1040 ? A&CDENoneoftheabove$560,000500,000310,00060,000 Question Number Two Thirty-eight multiple choice exercises/problems appear below. You must answer alt of them. For each problem you answer, insert the letter which incicates the correct answer. in the appropriate space on the separate answer sheet. A1 final answers have been rounded to the nearest $10. 1. Spouses Bill and getty Baker, aber 7s and 69 , maintain and reside in a heme in which Betty's mother, Berths, also lives. Bertha is age 92 and blind with zero gross income Bif and Betty provide 160% of Bertha's support. What standard deduction will Bal and betry claim on their 2021 joint federal incone tax return? ABCoENoneoftheabove527,80025,100=29,15030,500 2. Thomas Tuylor, who was injared in an automoble accident caused by another delver, Fiash Fisher, received $20,000 trom flash's insurance company to cover medical bills related to Thomas' injuries, $4,000 in damages becauve of the injury, and $15,000 in in punitive darases, all during 2021 . Thomas alio earhed $10,000 from a part-time job prior to the accident, received 5900 of United States series ef savings band interest, and collected 52,000 in workman's compensation from an unrelated injury sulfered while working at the part-time job, also all during 2021 . What is Thomas' adjusted gross income for the year? AACDENoneoftheabove$27,00025,90025,00010,900 3. In 2021, Russell Rogers is single with net investment incore of $18.000 and modi fied adjusted gross intome of $270,000, What is the aroont of hisireil's net investment income tax for the year? AsCDE52,6600680760Noneoftheabove 4, On May 1. 2021, Madje Mays \{cash basia) leases srosetty she cand to Tomuth Thompsor for rent of 51,000 per manth. On May 1, 2021. Torny pays Masate $2,000 as damage deposit which wil be reluraed at the end of the letse term. lit adsione, on May 1,2021 . Tommy pays Mazsle $6,000 as advance rent which is to be appigd ep rent for the last air months of the lease term. The lease rums for a one year period berinning on May 1 . 2021 . What is Magtie's paythents to Mahale during 2021, \begin{tabular}{rr} A & 512,000 \\ \& & 8,000 \\ E & 14,000 \\ E & 6,000 \\ \hline & Nane of the abcove \end{tabular} 5. Married couple inhn und Mary Mawon Neve separated. Mrry supported their two chile ren after the separation and paid 100 si of the eost of malntainify the horte in shich the children lived atter I Shn moved nut in September, 2021. The purties remain married as of December 31; 2021. Iohn fefuses to fe a joint retwer foe a04t. Which atatement is: true regarding Mary's finire status on 2724 Form 1042t A. Mary may claim abandoned spouse firing status II Mary inay Pie as a head of toorehicid C. Mary nuust file as inarried separate D. Many maysill file a joint returnt, thereby foreine koks to abo fle joindy E. None of the above available to fichard for 2021 ? A.B.C.D.I.None-oftheabove$520,0000500,00020,000 C Gain of \$4.000 E None of the above 8. Taxpeyer, Tanya Tanner; who was diworced on lanary 2,2020 , tas a so0, 3Ge 15, wing in her horne for the entire year of 2021 . The cont :o muinita Tanyary home was S 1 2,000 for 2021. Tanyz growided $8000 of that co9. The remain 5$5000 in previded by Tanya's ex-spouse, Thomas Tanner Tenya claims her so as a dependent. What is the most advantagedusfiling status for which Tanye rmay quiltr ton het aop 1 form 10.90? A sirgle 8. Mamied filing separate C. Head of hoursehold 0. Surviving spouse E. Some other availabie fiting status 9. Ianet Jones, ane 29, single and blind, attendis vCu fur time satkine a desree and aupports hersedi, During 2021, lanct earns alary of 523,500 , receives interet incone of 52,000,3 and a scholarshig from VCU in the amount of 56000 , of wrich ss ob0 so wpefied to VCU tultion and 51.000 5o the cost of required tentbocici. Assum that lanet has available 2021 iteinized dedoetions of 516,000 . Compate janet't taxabie incente for 2021. AB.CDE.Noneoftheabove$4,65012,45010,7509,000 10. Eifectlve Jaraary. 2,2017 , Andrew Arnoid purchased an annuitr for 5110,000, the terms of which pecride for paymeots to him of 515,250 anfulfy for twe we vears. Hica much, if any. of the 515.250 received in 2021 wit Andrew feport an sross income an his 2021 Form 1050? A0CDI$9,1705,0805,25011,000Noneoftheabove 11. Judith jones, sinsle, reports four wales of caplaf atsetr earing 20nt, as ser out below. Faxpayer's only other income for the year is salary of 530000 . What is Ju tish's. adjusted bross income for the year? ABcDENoneoftheabove580,00073,00086,00070,000 12. Fajaiyer, Donna Dawson, on her 2021 federal income tau return correctly elaims her son as a dependent. Assume that the son earris 57.000 in 2021 mowing lawes whille away froen hame attending colese and that the son fet a 2021 Form foso. What personal exemption dedjuction ambunt may the son chim on his 2021 Form 1040? AsCDt$4,20001,0004,300Noneoftheabore 13. Faxpayer acquired a personat use aset two years afo at a coit of $1,000. 5 ix month ago the taxpayer expended $400 to extend the aset's verful ife and siso make it more productive. One yoar ister, when the asset has a tair murket value of $900, Taxpayer converts the machine to bualness use. For deprecation purposes, at what basis amount will the astet convert to buainess use? ASCDINoneoftheabove1,4001,0009000 14. Norris Noble is tingle with 3021 Medicare wases or 5140,000 and net self ermployment incor of $100000. What is the total amotint of Nomr' adscional Medicare tax for the year? A&CDENoneoftheabove$1.5203600900 15. Albert Able is a former resident of Richmond, Virsta, bst han ived in Ofio tor the past three yeark. Albert is 100 supported by the three ineividuals listed below. all of wham reside in Richmond. Under a multiple suspart apreement, who would be eleble to doim atbert. depenslent? dependent? A Feakin only E. Crueles only C Patrick only. - Franklin or Patrick E Nane of the above 16. On Ausust 4; 2021, calendar yeaf taxpyer Ben Baiarasqures and places in gervice in his sole proprietorshipa mschine at a cost of Srapect. Asw-e that the machine has a aseful life of 15 year and a salyake walot of 510000 . Assume also that the machine is a Mucps 7 yesr asset, that Eas doen net ciaim ar 1RC 179 deduction of benus depreciation, and that Ben purchases no other depresirble assets during the year, What depecciation deduction win genciain ca Ris 2023 \{third year\} Form 1040, Sthedule C? ABCDE$10,4903,50010,7205,750Naneoftheabove 17. Soan 3ohnson is narried to norresient alien who fles federal income rax retums using a lane 30 fiscal year. Joan provides fow of the cert of maintaining householis in which a qualfying ching of joen resides for all twehe monthe ch calendaryear 2.921. Assuming that joan secks to incur the fawest porsible income tax fasithe what 2021 Form 1040 Hiling status will loan ute? A Single E= Married joint. C Married separate D. Head of housebold E None of the absve 18. Chris Crone (age 67) is marridd, but wor tile at marrief separate Aunme lhat Chris has: one child, who ausaifies as tis dependera. Amume alw thas oras tpoute has afreaby? the return. Adume finally that Chris hay ACl of 599,000 for the year, but has only \$7,009 ef qualifying ltemized deductions and withee 00 ciam the standard deducticin for the vear. What is Chria" twrable income for 202s? ABEDE.Woneaftheabove5.38.00032,70936,70043,000 19. Srantes farley has tocal assets of 520,000 and tatal labities ol 570000 . Puriuant 10 a Title 11 bankrupecy action, all 570000 of francer debt is diew Jrged. As a fesult of the debt dischar ge. Fravies will have prott incortic of what a mount? ABCDENoneoftheabove570,00050,000020,000 20. Jean Thomas, spouse of Patrick Thomas, died on july 11, 2021. Widower, Patrick Thomas marries Anne Able be July 12, 2021. The a0n1 Form 1043 for bean Thonas will be sabmitted under what filing classinication? A Marriedfiling jointly. B. Single C. Married filing separately D Head of household E. None of the above 21. Two years ago, Corp. A purchased residential resl estate fupartment complexf at a total cost of $250,000. Of this amoant, 550,000 was allocated to the underlying land. What is the corporation's allowable decreciation dedaction for the current year? ABCDENoneoftheabove$5,0005,1305,3507,270 22. In 2021, Dan Davis, afe 85 and shicle, recelved social 5 ecuray benefits of $14,000, dividend and interest payments of $21,000 a tamabie pension of 530,000 and a taxable ilf dilstributioe of 516,000 . What is the amcunt of Oan's adjusted gross income for 2021? ABCDENoneoftheabove$80,40078,90078,39067,000 23. During 2021, Albert redeems Series EE savings boodi for $5,000 cansisting of $2,000 interest and $4,000 principat. Albert has aet quakying efocation eapensus of 55,000 in 2021 . Albert, a single individue(t reports asfusted gross income (without the sevings bond interest) of $20,000. How much map albert exclude on his 2021 Foim 1040? A $1,670 b. 1,000 b. 2,000 E None of the above 24. Louise Lewis, age 72, is married and sopports her mother, age 95 . During 2021: touise pays $1,300 for prescription medicine for ber mother, who is dimed as a depenifent, $1,000 for prestription medicine for her husand, and $3,400 foe phricias bifs for henelf. Louise's: gross income is $55,000 and her ad,asted eross ince-e is $50,000. Assuming that Louse has sufficient other deductions to itemize for 2 til., bow much medical erpense will? Will touise and her husband anftually tedust on their joint 2021 form 1040 ? ABCDENoneoftheabove$1,9505,7001,950650 25. Five year property costing $25,000 was placed in sernce on 2 a wy 11,2021 and $75,000 of tive year property was also placed in service on December 4,2021 . All property is: depreciated using MCAS. Neither INC 179 nor boeas degreciution is dained. What. will be the 2021 depreciation deduction for the $25,000 asset? A&CDENoneoftheabove$6305,0003,05012,500 26. Corp. A purchases and pays 1004 of the premium cest for afe insurance an all of its emplayees. Employee Anne Able, age S5, has a policy srovides $40,000 of coverage. Assume that Corp. A pays $240.00 actual premium cont for fane s polloy for the year: Based on the above data, Corp. A wall include what amount of additional taxable income on Anne's W-2 for the vear? ABCDENoneoftheabove$2102602400 What amount should Donia AiCDENoneoftheabove$11,1009,50013,41010,400 28. Which, it any, of the listed taxes are not allowable as an iemited dediection? A. Federal gitt tax A. Federal gasoline ewise tax C. Virginia inheritance tax D. Al are dedoctible ar *emited deductions E. None are deductible at itemized deductions. 29. Which of the nisted interest expenses can be desurted as an Memured deduction? A. Mone equaty loan interest on funds barrowed for tution for the favpayers child B. Personal credit card interest C. Points pald upon refinancing a lan st rectal property D. investanens interest on money bonrowed to puictuse puiciogal bendt If. Hone of the above may be deoutted ar a 1 tenised deaturtion 30. Which of the listed statements is carrect? the recipient shareholder of Corp. A stock. B In computing bayd for each new block of stock rectived as resut of a nontaiable dividend, it it immaterial whthint the stock recelved in iefmical of net to the old stoch not change. Will be entitied to a tax deduction for the basis dif the expired nights E. All of the lilied statements are incarrect. 31. Which of the listed individuals wil quatify as desendent or Tapayer? A. A fwenty-5ix yeaf old 1 an who earned 55.500 between lanuary 1 and March 17, but was unemgloyed for the rexainder of the year Q. A seven year old niece supported by Tangayter, bot mio Foed whit Taxpayer's pareats alliear year C The flye year old son of Taxpayer's pest frend who fived with Taipdyar all year while the child's parents were in prison D. Taxpayer's twenty-one year old married dauster who was supported by Tavgayer. but who filed a joint return With her hurbsad. Assines shat the daughter earned $14,000 of income and the joint return reported a 5430 income tax liability. E None of the above 32. Which of the tisted items would norm thy be inciaded in arress ioconte? 1. A radio quiz show vacation prize lvalue \$1. Scoi 2. A 5100 cash payment received ats an employee safety a urard 3. A new watch (value $100) recteived by an empibyte usan athainament of four years with his.plee new employer A. Hem 1 onhy B. Item 2 only C. isem 3 only D. Iten 1, irem 2, and 1tem 3 all wowld be linchuded it ross income E. None of the above answers are cerrect 33: Anne Able, age ss, spends candiderable time each year purnuing her hebby of bastball card collecting, occasionaliy atiending cand collecter thews, where she boys and sells cards. During 2021, Anne recordi gross mies of 52100 at reven showi and incurs and puys ord nary and necetisary experess of 55,2.w. 0n Anne' 2021. Form 104, she mast report . A Cross revenue of $3,100, bus cen deduct $3,100 "1ar A 52 = 8) Gross revenue of $3,100, but can deduct $5,200 for Aff1, C Gross revenue of $3,100, but ean deduct 55,200 *fom AC:* D Gross revenue of $3,100, tru can dediet rero en Fonm 1040 E. Nore of the above 34. Ben Baker purchased Aax Company atock five yeirs a9o for 59,000. Een died in 2020 at a time when the stock's mariat valie was 512000 and feft the recte in wis will to has davghter, Anne, who sold the stock in 2021 for $13.000. What must Aree repert on her 2021 . form 1040? ABCDENoneoftheabove53,000eain1,000gain4,000gain0gainorloss 15. George Grayson owns 100 shares of common stock of Corp. A. Va a nontaxable, stock distribution, George receives 20 shares of Corp. A's preferred stock. Assume that Corp. A's common stock has a market value of $20 per share and that the preferred shares received by George have a market value of 530 per share. Assuming that George has a total basis or $1.000 for the 100 shares of Corp. A common stock owned at the time of the diatribution, What will be the total basis (not basis per share) of the 20 shares of preferred stock that George receives in the distribution? ABCDE$6000770230Noreoftheabove 36. Spouses, Chip and Carrie Carson, purchased a principal residence in fuchmond for: 375,000 on October 1,2020 . Carrie obtained a job in Bostor, and on December 1 , 2021 , they sold their home in Eichmond for 5650,000 and moved to Boston. How much gain, if any must Chip and Carrie recogniae on their 2021 joint federal income tax return? A&CDE.$500,0000275,000275,000Noneoftheabove 37. Ben Baker purchased stock five years ago for $5,000 which he gave (gift) to Anne Able at a time when the stock's market value was 57,000 sebsequently. Anne sold the stock for $7,200. What will be the amount of Arne's gain or loss on the saie? ABCDE$2,000gain200gain2,200gain0gainorlossNoneoftheabove 38. Taxpayers, lwasband and wife, sold their principal residence for $900,000 in October of 2021 They had purchased it 2004 for 5200,000 and mase major captal improvements during the period of ownetship totaling $40,000. How moch canc if ant. must they recognize on theie 2021 joint Form 1040 ? A&CDENoneoftheabove$560,000500,000310,00060,000