STUVIA 2024/2025
Family Tax Final Test 2
"Points" paid to obtain a loan for the purchase of a principal residence
Prepaid personal credit card interest
Business interest prepaid by a cash basis taxpayer
Business interest prepaid by an accrual basis taxpayer - ✔✔Which of the following prepaid interest is
deductible immediately?
$0
$15,000
$20,000
$30,000 - ✔✔Billy Ray owns several parcels of rental real estate, and he actively participates in
managing the properties. His total loss from these activities in 2021 is $30,000. Assuming that his
AGI for 2021 is $110,000, what is the allowable deduction from these properties in 2021?
$0
$2,900
$3,000
$7,900
%
$8,000 - ✔✔In the current year, John Barraclough has $50,000 of adjusted gross income, a $10,000
casualty loss and a $2,000 casualty gain. How much is John's net deductible federal casualty loss
after making all appropriate reductions, assuming the casualties were associated with a federally
declared disaster?
$0.
$50,000.
$90,000.
$140,000 - ✔✔Joan owns 30% of an S corporation that pays her $50,000 of wages and allocates to
her $90,000 of income. Her qualified business income from the S corporation is how much?
$1,000
$2,450
$980
$0 - ✔✔Maria is a full-time student at State College who just completed her second year of college.
She is claimed by her parents. She incurred the following costs: tuition and fees of $3,000, books for
classes $800, housing of $4,000. She has no income. What is her American Opportunity Credit on
her tax return?
$1,050,000
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, STUVIA 2024/2025
$2,620,000
$2,700,000
$970,000 - ✔✔During 2021, Klecker, Inc. placed in service $2,700,000 of Code Sec. 179 property.
How much can Klecker elect to expense under Sec. 179 in 2021?
$1,125
$10,000
$12,600
$8,000 - ✔✔Lance and LeAnn have four children, Amy age 14, Amber age 11, Mary age 8, and
Megan age 5. Lance is a full time student and works part time. LeAnn is a full time mother. Their AGI
was $10,000. What is their maximum child tax credit in 2021?
$1,600
$1,100
$1,000
$700
None of these - ✔✔During the year, the following items were charged to the interest expense
account of Doe Corporation:
Interest on additional income taxes assessed two years ago$400
Interest on bank loan to finance installation of new machinery. Bank loan was refinanced when
%
installation was completed$700
Interest deducted by bank from proceeds of Doe Corporation's 60-day loan taken out on December 1,
payable in full 60 days later$500
The maximum amount of interest expense that Doe Corporation, an accrual basis taxpayer, can
deduct for the current year is:
$10,000
$20,000
$0
None of these - ✔✔John Mapp dies with passive activity property having an adjusted basis of
$50,000, suspended losses of $20,000, and a fair market value at the date of Mr. Mapp's death of
$60,000. How much suspended loss can be taken on Mr. Mapp's final Form 1040 return?
$10,000 of portfolio income
$0
$20,000 of portfolio income
None of these - ✔✔All of the outstanding stock of a closely held C corporation is owned equally by
Evelyn Humo and Steve Bufusno. In 2021, the corporation generates taxable income of $20,000 from
its active business activities. In addition, it earns $20,000 of interest from investments and incurs a
$40,000 loss from a passive activity. How much income does the C corporation report for 2021?
stuvia
Family Tax Final Test 2
"Points" paid to obtain a loan for the purchase of a principal residence
Prepaid personal credit card interest
Business interest prepaid by a cash basis taxpayer
Business interest prepaid by an accrual basis taxpayer - ✔✔Which of the following prepaid interest is
deductible immediately?
$0
$15,000
$20,000
$30,000 - ✔✔Billy Ray owns several parcels of rental real estate, and he actively participates in
managing the properties. His total loss from these activities in 2021 is $30,000. Assuming that his
AGI for 2021 is $110,000, what is the allowable deduction from these properties in 2021?
$0
$2,900
$3,000
$7,900
%
$8,000 - ✔✔In the current year, John Barraclough has $50,000 of adjusted gross income, a $10,000
casualty loss and a $2,000 casualty gain. How much is John's net deductible federal casualty loss
after making all appropriate reductions, assuming the casualties were associated with a federally
declared disaster?
$0.
$50,000.
$90,000.
$140,000 - ✔✔Joan owns 30% of an S corporation that pays her $50,000 of wages and allocates to
her $90,000 of income. Her qualified business income from the S corporation is how much?
$1,000
$2,450
$980
$0 - ✔✔Maria is a full-time student at State College who just completed her second year of college.
She is claimed by her parents. She incurred the following costs: tuition and fees of $3,000, books for
classes $800, housing of $4,000. She has no income. What is her American Opportunity Credit on
her tax return?
$1,050,000
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, STUVIA 2024/2025
$2,620,000
$2,700,000
$970,000 - ✔✔During 2021, Klecker, Inc. placed in service $2,700,000 of Code Sec. 179 property.
How much can Klecker elect to expense under Sec. 179 in 2021?
$1,125
$10,000
$12,600
$8,000 - ✔✔Lance and LeAnn have four children, Amy age 14, Amber age 11, Mary age 8, and
Megan age 5. Lance is a full time student and works part time. LeAnn is a full time mother. Their AGI
was $10,000. What is their maximum child tax credit in 2021?
$1,600
$1,100
$1,000
$700
None of these - ✔✔During the year, the following items were charged to the interest expense
account of Doe Corporation:
Interest on additional income taxes assessed two years ago$400
Interest on bank loan to finance installation of new machinery. Bank loan was refinanced when
%
installation was completed$700
Interest deducted by bank from proceeds of Doe Corporation's 60-day loan taken out on December 1,
payable in full 60 days later$500
The maximum amount of interest expense that Doe Corporation, an accrual basis taxpayer, can
deduct for the current year is:
$10,000
$20,000
$0
None of these - ✔✔John Mapp dies with passive activity property having an adjusted basis of
$50,000, suspended losses of $20,000, and a fair market value at the date of Mr. Mapp's death of
$60,000. How much suspended loss can be taken on Mr. Mapp's final Form 1040 return?
$10,000 of portfolio income
$0
$20,000 of portfolio income
None of these - ✔✔All of the outstanding stock of a closely held C corporation is owned equally by
Evelyn Humo and Steve Bufusno. In 2021, the corporation generates taxable income of $20,000 from
its active business activities. In addition, it earns $20,000 of interest from investments and incurs a
$40,000 loss from a passive activity. How much income does the C corporation report for 2021?
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