Reference no: EM132731678

1)If a taxpayer in the 32% tax bracket has the opportunity to invest in a taxable corporate bond that pays 6% interest or to invest in a tax-exempt municipal bond that pays 3.5% interest(assuming that all other elements of the two bonds, e.g., risk, are equal and that taxable interest would not put the taxpayer in a higher tax bracket), which investment (without considering any effect of state and local taxes) would generate the greater after-tax yield?

2)Jackson, an unmarried taxpayer, qualified to itemize deductions. Jackson's adjusted gross income was $90,000 and he made a $20,000 cash donation directly to a needy family. During the year, Jackson also donated stock, valued at $30,000, to his church. Jackson had purchased the stock four months earlier for $15,000. What was the maximum amount of the charitable contribution allowable as an itemized deduction on Jackson's current year income tax return?

3)Walter swaps his warehouse for Sally's office building, and the exchange qualifies as a like-kind exchange. Walter's adjusted basis for the warehouse is $500,000 and the warehouse is subject to a liability of $150,000. The FMV of Sally's office building is $740,000 and it is subject to a liability of $95,000. Each asset is transferred subject to the liability. What is Walter's recognized gain, if any, on the transaction; and what is his basis in the office building?

4)A taxpayer sold for $250,000 equipment that had an adjusted basis of $220,000. Through the date of the sale, the taxpayer had deducted $40,000 of depreciation. Of this amount, $27,000 was in excess of straight-line depreciation. What amount of gain would be recaptured under Section1245 (Gain from Dispositions of Certain Depreciable Property)?
a.$40,000
b.$27,000
c.$13,000
d.$30,000

5)In 2019, David, a single 18-year old taxpayer, received a salary of $3,600 and interest income of $1,800. He had $600 in itemized deductions. Calculate David's taxable income assuming he is (a) self-supporting and (b) a dependent of his parents.

6)Jack and Jill are a married couple with one dependent child. In 2019, their salaries totaled$105,000, and they suffered a capital loss of $10,000. They also received $2,000 of tax-exempt interest. They paid $12,000 in interest on home acquisition indebtedness of $200,000, state and local income and real property taxes of $12,000, and medical expenses of $3,500. They also contributed $5,000 to charity and made a $10,000 deductible IRA contribution. On their 2019Married Filing Joint tax return what is their (a) adjusted gross income; (b) their total itemized deductions; (c) the amount of their exemptions; and (d) their taxable income.

7)Wendy is a single taxpayer, whose salary was $62,000 in 2019. In that year, she also suffered $6,000 short-term capital loss. Her itemized deductions for the year totaled $5,000. What are Wendy's 2019 (a) adjusted gross income; (b) taxable income; and (c) tax liability?

8)During 2019, Linda suffered serious injuries in an automobile accident. She incurred the following costs as a result:
Doctor bills $15,700
Hospital bills 10,300
Physical therapy to recover full mobility 5,000
Transportation to/from hospital and doctor's office 200
Linda is single with no dependents. Her 2019 salary was $68,000. She paid $1,000 in medical and dental insurance premiums, which were withheld from her salary on an after-tax basis, $4,250 in mortgage interest on acquisition indebtedness on her personal residence, and $1,500 in interest on her car loan. She was reimbursed for $15,000 in medical expenses by her health insurer. Calculate her 2019 taxable income.

9)In the current year, Cline sold land with a basis of $60,000 to Johnson for $100,000. Johnson paid $20,000 down and agreed to pay $16,000 per year, plus interest, for the next five years, beginning in the second year. Under the installment method, what gain should Cline include in gross income for the tax year following the year of sale?

10)Josephus, an unmarried taxpayer filing single with no dependents, has AGI of $1,200,000and reports the following items in 2019:
Taxable income $ 700,000
Tax preferences 40,000
AMT Adjustments related to itemized deductions 30,000
Regular tax liability $ 150,000
What is Josephus's AMT liability for 2019?