On July 1, 2013, Ted, age73 and single, sells his personal residence of his last 30 years for $365,000. Ted’s basis in his residence is $35,000. The expenses associated with the sale of his home total $20,000. On December 15,…
John purchased his home in 1995 for $600,000, consisting of $400,000 cash plus $200,000 he borrowed from The Bank. The Bank took back a $200,000 mortgage on the property. In 2005, when John’s home was worth $850,000, Tom refinanced his…
At the beginning of 2012, Margaret’s adjusted basis in her 50 percent interest in MP Partnership, a general partnership, was $10,000. During 2012, Margaret did not make any additional contributions to MP Partnership, and Margaret’s share of MP Partnership liabilities…
A shareholder’s adjusted basis in the shareholder’s stock in an S corporation is used to make determinations with respect to which of the following? a. the extent to which a distribution made by the corporation to the shareholder is taxable.…
Which of the following tax consequences is not determined by reference to a shareholder’s adjusted basis in the shareholder’s stock in an S corporation? a. the extent to which a distribution made by the corporation to the shareholder is taxable.…
Jennifer owns 1,000 shares of Ernie Company. Her adjusted basis in the shares is $100,000. Ernie Company has no earnings and profits. It made a cash distribution to its shareholders, of which Jennifer received $60,000. The result of this distribution…
On January 2, 2012, Douglas and Jane created DJ Corporation. Douglas contributed to DJ Corporation assets worth $100,000 that had an adjusted basis to Douglas of $14,000. The contributed assets were subject to a liability of $16,000. In exchange for…
Which of the following miscellaneous deductions are not subject to the 2 percent of adjusted gross income limitation? a. Investment expenses b. Gambling losses to the extent of gambling winnings c. None of the above d. Union dues e. Unreimbursed…
Which of the following is a false statement regarding the adjusted current earnings adjustment to alternative minimum taxable income? a. It is an increase by 75% of the excess of adjusted current earnings over alternative minimum taxable income (excluding the…
Molly is a 40% partner in the MAP Partnership. During the current tax year, the partnership reported ordinary income of $210,000 before payment of guaranteed payments and distributions to partners. The partnership made an ordinary cash distribution of $30,000 to…
