May 31 Quiz

Question 1

Under an installment agreement between an individual and the IRS to pay off current year taxes over an agreed upon period of time…

Answer 1

Neither interest nor late payment penalty is waived

Question 2

After December 31, 1999, if the taxpayer is an individual who filed the tax return in a timely manner, including extensions, the 0.5% penalty rate is reduced to…

Answer 2

0.25%/month under installment agreement

Question 3

3 exceptions to uniform capitalization rules

Answer 3

1 editorial costs by freelance writer

2 research and experimental expenditures

3 mine development and exploration costs

Question 4

Warehouses (resellers) of personal property that have average annual gross receipts for the preceding 3-taxable year period exceeding $10 million must…

Answer 4

Capitalize warehousing costs

Question 5

Like kind exchange, basis of property received calculation 6

Answer 5

Basis of property given up
\+ gain recognized
\+ boot paid
- loss recognized
-boot received
= basis property acquired

Question 6

In a like kind exchange if a machine with a basis of $20,000 and FMV of $30,000 is exchanged for $30k in value, what is the realized gain?

Answer 6

$10,000

Question 7

If a residence that is sold has not been occupied for at least 2 years, the $250,000 exclusion is prorated if sale is due to…

Answer 7

1 change of place of employment

2 health

3 unforeseen circumstances as provided in regulations

Question 8

If a residence is sold, because someone is moving for employment and the residence has only been lived in for 1 year, what is the exclusion?

Answer 8

$125,000 ((1yr/2yr) x $250,000)

Question 9

Which of the following services is a CPA generally required to perform when conducting a personal financial planning engagement?

Answer 9

Assisting client to identify tasks that are essential in order to act on planning decisions