Income tax, ACT 4494 final exam help

all requirements and questions in the file
act_4494_final_exam_.docx

Unformatted Attachment Preview

Don't use plagiarized sources. Get Your Custom Essay on
Income tax, ACT 4494 final exam help
Just from \$10/Page

PROBLEMS (18 Points Total for Problems). Show and label all your work in a neat and
orderly manner.
PROBLEM 1 (10 Points)
David realized the following net Section 1231 gains and (losses) for the years 2010 through 2014
as shown below. He did not realize any Section 1231 gains or losses for the years before 2010.
Year
Net Section 1231 Gain or (Loss)
2010
(\$4,000)
2011
(\$21,000)
2012
\$17,000
2013
(\$11,000)
2014
\$9,000
David realized a net Section 1231 gain in 2015 of \$72,000. How much of the net Section 1231
gain of \$72,000 in 2015 is
(1) treated as ordinary income \$______________________
(2) treated as though it were a long-term capital gain \$______________________
PROBLEM 2 (8 Points)
Ann bought depreciable equipment and placed it in service in her business in January in a year in
which bonus depreciation was NOT allowed. The asset cost \$40,000. Assume that it is 5-year
property under the Modified Accelerated Cost Recovery System (MACRS) and the cost recovery
percentage for the first year is 20.00 percent. She is using the prescribed MACRS procedures.
She did not buy any other depreciable assets for her business during that year. She elected to
deduct \$12,000 of the \$40,000 cost under Section 179. She estimates that the salvage value of
the equipment is \$4,000 at the end of its 5-year useful life.
What is her cost recovery deduction for (1) the year she purchased the depreciable equipment (do
not include the Section 179 deduction—just determine the cost recovery deduction under the
2
MACRS under Section 168) and (2) the second year show owned and used the depreciable
(1) Cost recovery deduction for the first year \$__________________________
(2) Cost recovery deduction for the second year \$_________________________
ESSAYS (42 Points Total for Essays—7 Essay Questions @ 6 Points Each)
Please be sure to answer the essay questions thoroughly. Use complete sentences and correct
grammar and spelling.
ESSAY 1 (6 Points)
Jones Corporation bought land and an old building for a total cost of \$500,000 with \$400,000
assigned to the land and \$100,000 assigned to the old building. Jones Corporation wants to build
a new building on the land. Jones Corporation incurred and paid a cost of \$60,000 to raze (tear
down) the old building to prepare the land to build a new building on it. What is the tax
treatment of the \$60,000 cost to raze the old building?
ESSAY 2 (6 Points)
Assume that a taxpayer wants to maximize business deductions for the current year. The
taxpayer purchased several items of depreciable personal property that are eligible for the
Section 179 deduction. Some of the items of depreciable personal property are 5-year property
under MACRS and such items are 7-year property under MACRS. Each of the items is eligible
for the Section 179 deduction. None of the assets is a vehicle. The taxpayer purchased the assets
as used property. Used assets are NOT eligible for bonus depreciation.
Explain how the taxpayer should choose which items on which to claim the Section 179
deduction if the taxpayer is subject to limits that prevent the taxpayer from deducting all of the
eligible items under Section 179.
3
ESSAY 3 (4 Points)
Explain the basic differences and similarities between a defined benefit pension plan and a
defined contribution pension plan.
SHORT ESSAY 4 (6 Points)
Explain the basic differences and similarities between contributions to a traditional IRA and
contributions to a Roth IRA.
4
SHORT ESSAY 5 (6 Points)
Explain the basic differences and similarities between distributions from a traditional IRA and
distributions from a Roth IRA. Are distributions from a Roth IRA ever taxable? If so, under what
circumstances?
5
SHORT ESSAY 6 (6 Points)
Define and explain in detail the following types of income: (1) active income, (2) portfolio
income, and (3) passive income. Include an example of each of the three kinds of income in your
explanation.
SHORT ESSAY 7 (6 Points)
List and briefly explain any three (3) of the nontaxable fringe benefits an employer may provide
to its employees.

attachment

Calculate the price of your order

550 words
We'll send you the first draft for approval by September 11, 2018 at 10:52 AM
Total price:
\$26
The price is based on these factors:
Number of pages
Urgency
Basic features
• Free title page and bibliography
• Unlimited revisions
• Plagiarism-free guarantee
• Money-back guarantee
On-demand options
• Writer’s samples
• Part-by-part delivery
• Overnight delivery
• Copies of used sources
Paper format
• 275 words per page
• 12 pt Arial/Times New Roman
• Double line spacing
• Any citation style (APA, MLA, Chicago/Turabian, Harvard)

Our guarantees

Delivering a high-quality product at a reasonable price is not enough anymore.
That’s why we have developed 5 beneficial guarantees that will make your experience with our service enjoyable, easy, and safe.

Money-back guarantee

You have to be 100% sure of the quality of your product to give a money-back guarantee. This describes us perfectly. Make sure that this guarantee is totally transparent.

Zero-plagiarism guarantee

Each paper is composed from scratch, according to your instructions. It is then checked by our plagiarism-detection software. There is no gap where plagiarism could squeeze in.

Free-revision policy

Thanks to our free revisions, there is no way for you to be unsatisfied. We will work on your paper until you are completely happy with the result.