Reference no: EM132883316

Questions -

Q1. Tom and Cate are married and live in California. They own a duplex from which they received $30,000 during the year in rents. Tom also receives rents of $10,000 for a condominium he owned before he and Cate were married. Assuming Tom and Cate file separate federal income tax returns, how much rental income would Cate report on her income tax return?

a. $20,000

b. $15,000

c. $25,000

d. $40,000

e. $0

Q2. During the taxable year Forest signed a three year lease to rent office space from Clyde. Forest paid rent of $1,200 for the first month, $1,200 for the last month's rent, and $1,000 for a security deposit. How much must Clyde include in gross income for the taxable year as a result of these payments?

a. $1,200

b. $2,400

c. $3,400

d. $0

Q3. Harold makes the following alimony payments to Wanda:

Year 1 - $65,000

Year 2 - $40,000

Year 3 - $15,000

What is the total amount of alimony recapture to be taken into account in Year 3?

a. $42,500

b. $37,500

c. $15,000

d. $27,500

e. $0