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1 )At the beginning of the year, Joe's basis in his partnership interest was $5,000. During the year, Joe contributed $10,000 in cash to the partnership and signed a bank loan to be personally liable for the partnership's debt of $25,000. For the current year, the partnership allocated a loss of $60,000 to Joe. In the following year, Joe's portion of the partnership income is $30,000. Which of the following is accurate?

Select one:

a.

Joe may deduct all of the $60,000 loss in the current year.

b.

Joe's basis in his partnership at the end of the year is $15,000.

c.

Joe may carry over a $45,000 loss to the following year.

d.

In the following year, Joe's reportable taxable income from the partnership is $10,000.

2)The accumulated earnings tax, which is imposed on corporations for the accumulation of earnings in excess of reasonable business needs, does not apply to:

Select one:

a.

Both b. and c.

b.

All of the above.

c.

Corporations subject to the personal holding company tax.

d.

Widely-held corporations.

e.

Closely-held corporations.

3)Melody and Todd are married and have employee wages of $250,000 each in 2014. They have no other income. How much additional 0.9% Medicare surtax will Melody and Todd have to pay or receive as a refund when they file their 2014 income tax return?

?

Select one:

a.

$1,350 will be refunded with their return.

b.

$1,350 will be due with their return in addition to amounts withheld.

c.

$900 will be refunded with their return.

d.

$3,600 will be due with their return in addition to amounts withheld.

4)Mark the incorrect answer. Estimated income tax payments:

Select one:

a.

Are made in four installments on April 15, June 15, and September 15 of the tax year and on January 15 of the following year.

b.

If inadequate, may result in nondeductible penalties.

c.

Need not be filed if the estimated tax, after subtracting withholding, can reasonably be expected to be more than $1,000.

d.

May be based on the amount of the tax liability for the prior year.

5)For the year 2014, Susan had salary income of $20,000. In addition she reported the following capital transactions during the year:

Long-term capital gain	$ 7,000
Short-term capital gain	$ 3,000
Long-term capital loss	$(2,000)
Short-term capital loss	$(4,000)

There were no other items includable in her gross income. What is the amount of her adjusted gross income for 2014?

Select one:

a.

$24,000

b.

$19,000

c.

$25,000

d.

$20,000

e.

None of the above

6)Carlos bought a building for $113,000 in 2010. He built an addition to the building for $26,000. In 2014, he sold it for $186,000. What was his long-term capital gain?

Select one:

a.

$99,000

b.

$73,000

c.

$0

d.

$186,000

e.

$47,000

7)During 2014, Travis purchases $13,000 of used manufacturing equipment (7-year property) for use in his business, his only asset purchase that year. Travis has taxable income from his business of $500,000. What is the maximum amount that Travis may deduct under the election to expense?

Select one:

a.

$500,000

b.

$13,000

c.

None of the above

d.

$25,000

e.

$0

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