Chapter 2

Question 1

Directors Fees are considered

Answer 1

Self-Employment Income

Question 2

Gains from the sale of livestock used for hauling, dairy breeding or sporting purposes generally result in capital gains and….

Answer 2

are not reported on schedule F but rather Form 4797

Question 3

The gain from sales caused by a drought, flood or other weather related condition can be postponed for up to _____ years

Answer 3

4

Question 4

Crop insurance and disaster payment are generally ________ the year it is recieved

Answer 4

included in income

Question 5

A taxpayer qualifies as a farmer by receiving at least _____ or the total gross income from farming in the current year

Answer 5

2/3

Question 6

Farmers must pay all estimated taxes by…..

Answer 6

Jan 15 and file the 1040 return and pay any additional taxes by April 15th

Question 7

Section 1244 Stock

Answer 7

Stock of a small business (common or preferred, voting or nonvoting) corporation held since its issuance and issued for money or other property (not other stocks or securities)

Question 8

Up to $________ of loss realized on disposition or worthlessness of 1244 stock is treated as an ordinary loss

Answer 8

50k or 100k jointly

Question 9

Up to $50k ($100k jointly) of loss realized on disposition or worthlessness of 1244 stock is treated as

Answer 9

ordinary loss

Question 10

To qualify as a small business corporation for 1244 stock

Answer 10

the aggregate amount of money and other property received by the corporation for stock as a contribution to capital and as pain in surplus cannot exceed $1 Million.
If paid in capital exceeds 1 million only part of the stock would qalify

Question 11

When an owner of 1244 stock makes an additional capital contribution but does not receive any additional shares of stock

Answer 11

the additional investment cost is added to the basis of the previously held stock but does NOT qualify for the 1244 ordinary loss treatment

Question 12

Section 1244 stock cannot be used for ordinary loss benefit if

Answer 12

gifted to them

Question 13

Section 1202 Stock purchased between Feb. 18, 2009- Sept. 27, 2010

Answer 13

gain from the sale is 75% excluded

Question 14

Stock qualified as a Section 1202 stock if…

Answer 14

1. received after Aug 10, 1993
2. Held by the taxpayer for over 5 years
3. The seller is the original owner of the stock
4. The corporation is a domestic C corporation
5. the corporations gross assets do not exceed $50 million at the time the stock was issued

Question 15

If there is an exchange of like-kind property in which you also give ______ and the exchange results in a loss- you are unable to deduct the loss.

Answer 15

Cash

Question 16

If there is an exchange of like-kind property in which you also give cash and the exchange results in a loss- you ARE / ARE NOT able to deduct the loss.

Answer 16

Are not

Question 17

Holding period for like kind exchanges between related parties

Answer 17

2 years

Question 18

If at least 2/3rds of your gross income was from farming two years in a row _____ estimated tax payment is required

Answer 18

one

Question 19

The estimated tax payment for a qualifiying farmer is

Answer 19

the smaller of 2/3 your total tax for the current year or 100% of your taxes from the previous year

Question 20

Receipt of agricultural program payments by a farmer for refraining from growing crops should be reported as….

Answer 20

Farm Income, not subject to self-employment tax

Question 21

Bad debts recovered by an individual under the accrual method should be….

Answer 21

reported as other income in the current year

Question 22

Partnership interests CAN or CAN NOT qualify for the like kind exchange?

Answer 22

Can Not