David is a college professor who does some consulting work on the side. He uses 25% of his home exclusively for the consulting practice.

David is a college professor who does some consulting work on the side. He uses 25% of his home exclusively for the consulting practice. He is single and 63 years old. His AGI (without consideration of consulting income) is $45,000. Other information follows:

Need a Professional Writer to Work on this Paper and Give you Original Paper? CLICK HERE TO GET THIS PAPER WRITTEN

Income from consulting business                            $4,000

Consulting expenses other than home office           1,500

Total costs relating to home:

Interest and taxes                                                  $6,500

Utilities                                                                      1,500

Maintenance and repairs                                           450

Depreciation (business part only)                          1,500

 

Calculate David’s AGI.

 

 

43) Janet purchased her personal residence in 2003 for $250,000. In January 2013 she converted it to rental property. The fair market value at the time of conversion was $210,000.

A) Determine the amount of cost recovery that can be taken in 2013.

B) Determine the amount of cost recovery that could be taken in 2013 if the fair market                value of the property were $350,000.

 

Chapter 7

 

49) Ricardo acquired a warehouse for business purposes on August 30, 1994. The building cost $400,000. He took $226,900 of depreciation on the building and then sold it for $500,000 on July 1, 2013. What are the amount and nature of Ricardo’s gain or loss on the sale of the warehouse?

A) What is the adjusted basis for the warehouse?

B) The gain or loss is realized on the sale of the warehouse by what amount?

C) By what amount of the gain or loss is unrecaptured?

D) At what rate is the unrecaptured gain or loss taxed?

E) What amount of gain or loss qualifies as a 1231 gain or loss?

51) In 2013 Rosalva sold stock considered short-term for a gain of $875 and stock considered long-term for a loss of $3,400. She also had a $3,000 short-term loss carryover from 2012 and a $1,240 long-term loss carryover from 2012.

A) What amount will be shown as a short-term gain (loss) for 2013?

B) What amount will be shown as a long-term gain (loss) for 2013?

C) How much of the loss is deductible in 2013?

D) What is the amount of long-term carryover to 2014?

 

 

Chapter 8

 

37) Matt and Marie own a vacation home at the beach. During the year, they rented the house for 42 days (6 weeks) at $890 per week and used it for personal use for 58 days. The total costs of maintaining the home are as follows:

Mortgage interest        $4,200

Property taxes                  700

Insurance                       1,200

Utilities                         3,200

Repairs                          1,900

Depreciation                  5,500

A) What is the proper tax treatment of this information on their tax return using the Tax Court method?

B) Are there options available to allocate the expenses between personal and rental use? Explain.

C) What is the proper tax treatment of the rental income and expenses if Matt and Marie rented the house for only 14 days?

 

38) Janet owns a home at the lake. She incurs the following expenses:

Mortgage interest        $1,300

Property taxes                  800

Insurance                       1,500

Utilities                         1,800

Repairs                             300

Depreciation                  4,000

What is the proper treatment of the rental income and expenses in each of the following cases? Use the Tax Court allocation method, if applicable.

 

Case                Rental Income             Days Rented               Personal Use Days

A                     $9,000                         45                                            10

B                     12,000                         55                                            25

C                     6,000                           10                                            30

D                     22,000                         365                                          0

Need a Professional Writer to Work on this Paper and Give you Original Paper? CLICK HERE TO GET THIS PAPER WRITTEN

Needs help with similar assignment?

We are available 24x7 to deliver the best services and assignment ready within 3-4 hours? Order a custom-written, plagiarism-free paper

Get Answer Over WhatsApp Order Paper Now