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For each multiple-choice question, circle the correct answer. 1. To be deductible for tax purposes, trade or business expenses must be: Ordinary and necessary Reasonable in amount a. b. C. d. 2. If a taxpayer drives 10,000 business miles during 2022, and uses the standard mileage method, the taxpayer's deduction is: a. b. C. d. e. a. b. 3. Fines and penalties paid to the government for the violation of a law are: Generally deductible for tax purposes as business expenses Not deductible for tax purposes Deductible if ordinary and necessary Deductible if reasonable in amount C. d. O a. b. 4. For individual taxpayers, deductible losses for tax purposes do not include: Business losses Investment losses Personal losses Personal casualty or theft losses incurred in connection with presidentially declared disasters C. d. Related to an activity which is deemed to be a trade or business All of these 5. For MACRS depreciation purposes, autos and light-duty trucks are depreciated over what period? a. $10,000 $2,000 $5,850 $5,000 none of the above b. C. d. Three years Five years Ten years Fifteen years 1 6. The IRS takes the position that a taxpayer's tax home, for purposes of determining travel f 11 Mobile View A Read Aloud Headings

1. To be deductible for tax purposes, trade or business expenses must be: a. Ordinary and necessary b. Reasonable in amount c. Related to an activity which is deemed to be a trade or business d. All of these 2. If a taxpayer drives 10,000 business miles during 2022, and uses the standard mileage method, the taxpayer's deduction is: a. $10,000 b. $2,000 c. $5,850 d. $5,000 e. none of the above 3. Fines and penalties paid to the govemment for the violafion of a law are: a. Generally deductible for tax purposes as business expenses b. Not deductible for tax purposes c. Deductible if ordinary and necessary d. Deductible if reasonable in amount 4. For individual taxpayers, deductible losses for tax purposes do not include: a. Business losses b. Investment losses c. Personal losses d. Personal casualty or theft losses incurred in connection with presidentially declared disasters 5. For MACRS depreciation purposes, autos and light-duly trucks are depreciated over what period? a. Three years b. Five years c. Ten years d. Fifteen years 6. The IRS takes the position that a taxpayer's tax home, for purposes of determining travel what period? a. Three years b. Fine yeirs 1 c. Ten years d. Fifeen yeurs 6. The ARs takes the poeition that a taupayer's tax home. for purposes of delermining travel expenses, is at the locution of the taxpayer's: a. Principal place of business b. Personal residence c. Pincipal place of butiness or pesonal iesidence, whichever nevults it a lover tar deduction d. Personal residence if located in enoess of 50 miles trom princhal place of business 7. Last jear, a cerporaton purthased an otict tulding for $220.000 of which $30000 was alocated to the iand on which the bulding was located. The bulding's savage value was estimaded to be $50,000. The eorporaticnls cumert year depreciation seduston tor the buling is: a. $3,590 b. 94872 c. 55.641 d. $6,909 8. During 2022. a corpocason purchased machinery costng $1,200,000 and a waretoule costing 51.000 .000 . These are the only two acqusitions of degreciable property purchased by the corporation in 2022. The maximum deduction the earporation can claim under Cade Sec. 179 in 2022 in: a. $2.800,000 b. $1080000 c. $2,700,000 d. $1,200000 9. Ach dones ustat a dry ahacinc machine in her business; and a was complelely destroyed by five. At Fie time of the fre, the adjusted basis west fita po0 and its far makket value was $18.000. Hiw much is Ariel ioss? a. 518000 b. $2.000 c. \$20.000 d. Nore of these 10. During 2022. Hugh Hughes reported the following income and less: Activity x 1550,000) Activity Y 520,000 Beth Activity X and Actvity Y are passive to Mr, blugries. Hugh purctused Activity X in 1908 and Actrily Y in 1994 How mach is the lose that Me, Hughes may desuct in 2ar2? a. sin,000 b. 530,000 e 3,009 d. 80 11. Diby Ray cwns beveral parcels of iertal real estate, and he actively particjusies in managing the properses. Hs total loss from these activibes in 2022 is $30.000 Assuming that his AGi for 2022 is $110,000, what is the alceable deduction Irom these precerties in aoe?? a. b. $15,000 e 30,090 d $80.080 12. Which of the following statemerts is incaract? a. A vacation home bectemes a pesonal residense when its twher utes if mare flan the prester of 14 days or 10 pervent of the rumber of mental diys b. If a dwelling is classified as a personal residence, rental losses are not decuctible. c. H an individual rents ouf a vacation home for mone than 14 doys and does not use it excessively for persorial purposes. losses are alowed to be deducted from. AC. d. H an individual actively participates in the rertal red estate activy. us lo 3 \&.s.000 of losses can be used to othet nonpassive income. 13. Mike, who is single, has $100000 of salary. $15, 000 of income from a limited partnership, and a $30,000 passive loss from a real estabe rental activity in which he actively plaficipates. His modifed atfusked gross ifeame is $100.050. Or the $30,000 loss, thow much is deductble? a. 530,000 b. 510,000 b. 525.000 d. $0. 14. When a tispwer incurs an NOL, in 2023, that is not atrtbubable 10 a easuaby or thent less. fhe isciuyer may? a. Carty the NoC farward indefinhely. b) Carry the NOC back theee yeart and forward orly 20 yeare. c. Cerry the NOC back five years and forwand only 15 years d. All ef thet ptiver 15. Sxeve Coiburr's portable sawmill used 100\%, for business, was corrilebely aestroyed by fre. The sawmill had an affusted basis of 525.060 and a tair market valat of 550 oc0 belore the fine. The sammil was uninsured Sevels canuaty land is: a. $34,900 b. 50.000 c. $49,900. d. 535,000 16. Which of the following is not a passive actrity? a. Owning a working interest in of and gas wels. b. Owning a limted partnership intereat in cil and gat wolls c. Cwning a Imited partnerstip intenest in red tstate. d. Owning a business and not materialy patiopohing. 17. Mark Miler, 52, paid the folowing medical expenses during 20222 ial in ewtess of reimbursements Assume Mark's mother would have qualfed as a dependent under pre-205l nies. If the Mllers' adjusted gross inoome was $60.000, how much of a medical expense deduction may the Milers ciam on their joint return? a. 51,770 b. 52830 e. 94.330 d. sib30 e. None of these 16. Karen Baker, a cash basis calenda year taxpayer, paid the tollowing durirg the year: 18. Kaxen Baber, a cash basks calondar year taxpayer, paid the following during the yoar: 4 What itemized seduction may Karen claim for aaces on her resum? a. 55,520 b. 59820 c. 310.000 d. 315.420 e. None of these 19. Catry buys a house (her principa residence) during the curren your for $2.000.000. paying $500.600 down and bornowing the bthar $1.500.000 at 5% interest If her interest expense for the year is $75,000, how much will her maximum deduction for interest expenses be? a. 575.000 b. $50.000 b. $37,500 d. 30 e. None of these 20. What is the amount of inserest deduction allowed for the current year, assurring Marge Meyor incurred thet following Iniertit on boan ised to purchase land for imvestment (assume no net imvestment income) Inierest on loan used to purchase personal residence Interiest on loan lited is puechase motarcyole Interest on loan to jurchase 100 shares of General Auto a. 527,009 B. $6,000 b. 927,500 d. $21.000 e. None of these 518.000 S. fisco 5500 s. 3600 21. Weich of the following inferest payments is not deductiole for tax purposes: a. Qualfed residence interest b. Personal eredit card interent c. Investment interest d. Trade or business irterest. a. Qualied residence interest b. Persectal credi eard interest t. Investment interest d. Trade or business interest 22. Which of the following prepaid inberest is deductide immediahely? a. Points' paid to obtain a loan for the purchase of a principal residence b. Prepoid personal credit card intecest c. Business interest prepaid by a cash basis daxpayer d. Business interest prepaid by are accrual basis taxpeyer 23. If an individual tampayer contrbutes captal gain property io a qualised publc charty and wants bo deduct fair market value, the deduction woeld be subject to which of the follenithe limits? a. 20 pervent of the tampayer's AGI. b. 30 peroent of the tampayer's AGL. c. 50 percent of the tampayer's AGI. d. 60 percert of the lampayer's ACI. 24. Slock in the AaC Corporation was contribused to a public charkable organization. The basis in the stock was $1,000, but its far market value was $1,500 at the fime of the donation. Indicale the correct income cax treatment as a testit of the bonation. The meck was reid long tarm a. Contributon of 51,000 (no gain recognized) b. Contribution of $1,500 (na gain reoognized) 6. Contributon of $1.500 (capial gain recognised $00 ) d. Contritution of $1,000 (capieat gain resegrised \$\$09) e. None of these 25. Abert Algood has atjusted groes income in the curtert year of 930,000 in 2 th?2 the gave $5.000 tash and a capital pain assed (held iong term) eosting $10.000, worth $12,000,50 a public charity, and an $5,000 cash oontribution to a 20 perpent charity. What is the amount of his maximum allewable cument charzable contribution deductich. assuming no elections are mase? (Assume any carryovers will be ssed in the future-) a. $25,000 b. $20,000 c. $15,000 d. $14,000 e. $23,000

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