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CPA Exam REG |Questions with 100% Verified Answers
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CPA Exam REG |Questions with 100% Verified Answers
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CPA Exam REG |Questions with 100% VerifiedAnswers
A taxpayer received a painting valued at $8,000 as a gift. The donor purchased
the painting a year earlier for $4,500 and paid no gift tax on the transfer. Nine
months later, the taxpayer sold the painting for $9,000. What is the amount and
classification of the capital gain?
A) $1,000 short-term
B) $1,000 long-term
C) $4,500 short-term
D) $4,500 long-term - ✔ ✔ D) $4,500 long-term
A taxpayer's property with an adjusted basis of $75,000 and fair market value of
$105,000 was condemned by the state. The taxpayer received $100,000 from
the state as compensation for the property, and six months after the
condemnation purchased a replacement property for $100,000. What are the
tax consequences of this transaction?
A) No gain is recognized, and the basis in the new property is $74,000.
B) No gain is recognized, and the basis in the new property is $100,000.
C) A gain of $25,000 is recognized, and the basis in the new property is $100,000.
D) A gain of $30,000 is recognized, and the basis in the new property is $100,000. -
✔ ✔ A) No gain is recognized, and the basis in the new property is $74,000.
In the current year, Madison inherited investment property from a parent's
estate with a fair market value of $200,000. The parent had a basis in the asset of
,$100,000. Madison sold the property for $150,000 in the year the parent died.
What is Madison's gain or loss on the sale?
A) $50,000 short-term gain.
B) $50,000 long-term gain.
C) $50,000 short-term loss.
D) $50,000 long-term loss. - ✔ ✔ D) $50,000 long-term loss.
A taxpayer employed full time as an engineer has the following income items:
self-employment income $50,000
rental income $15,000
dividend income $2,000
long-term capital gain $1,500
short-term capital loss $1,000
What amount is the taxpayer's passive income?
A) $2,500
B) $15,000
C) $17,500
D) $18,500 - ✔ ✔ B) $15,000
A taxpayer reported the following in a tax year:
, Salary $122,000
Capital gain dividends $3,700
Partnership short-term capital loss ($6,300)
The taxpayer acquired the partnership interest during the year in exchange for a
capital contribution of $2,750, and there were no additional items affecting the
taxpayer's basis in the partnership. What is the taxpayer's adjusted gross income
for they year?
A) $119,400
B) $122,000
C) $122,700
D) $122,950 - ✔ ✔ D) $122,950
Which of the following taxpayer's would NOT qualify for the filing status of head
of household?
A) A single taxpayer whose spouse died in the preceding tax year and who has
a dependent child living in the household.
B) A married taxpayer with a dependent child in the household who has lived
apart from the taxpayer's spouse for the entire year due to abandonment.
C) A single taxpayer who provides over one-half of the support for a dependent
parent in a nursing home but does NOT have a qualifying child in the
household.
D) A single taxpayer who provides one-half of the support for a dependent child
who has lived almost the entire year at a US university while pursuing an
undergraduate degree. - ✔ ✔ A) A single taxpayer whose spouse died in the
preceding tax year and who has a dependent child living in the household.
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