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| Section | Weight | Objectives |
|---|---|---|
| Business Law | 10–20% | - Contracts and agency
|
| Federal Taxation of Property Transactions | 12–22% | - Property transactions
|
| Federal Taxation of Individuals | 15–25% | - Individual income taxation
|
| Federal Taxation of Entities | 18–28% | - Business entity taxation
|
| Ethics, Professional Responsibilities, and Federal Tax Procedures | 15–25% | - Federal tax procedures
|
1. Which one of the following will result in an accruable expense for an accrual-basis taxpayer?
A) An invoice dated prior to year end but the repair completed after year end.
B) A repair completed prior to year end but not invoiced.
C) A repair completed prior to year end and paid upon completion.
D) A signed contract for repair work to be done and the work is to be completed at a later date.
2. Which of the following is subject to the Uniform Capitalization Rules of Code Sec. 263A?
A) Research and experimental expenditures.
B) Warehousing costs incurred by a manufacturing company with $12 million in annual gross receipts.
C) Mine development and exploration costs.
D) Editorial costs incurred by a freelance writer.
3. Smith made a gift of property to Thompson. Smith's basis in the property was $1,200. The fair market
value at the time of the gift was $1,400. Thompson sold the property for $2,500. What was the amount of
Thompson's gain on the disposition?
A) $2,500
B) $0
C) $1,100
D) $1,300
4. For a cash basis taxpayer, gain or loss on a year-end sale of listed stock arises on the:
A) Trade date.
B) Date of delivery of stock certificate.
C) Date of receipt of cash proceeds.
D) Settlement date.
5. Conner purchased 300 shares of Zinco stock for $30,000 in 1980. On May 23, 1994, Conner sold all the
stock to his daughter Alice for $20,000, its then fair market value. Conner realized no other gain or loss
during 1994. On July 26, 1994, Alice sold the 300 shares of Zinco for $25,000.
What amount of the loss from the sale of Zinco stock can Conner deduct in 1994?
A) $5,000
B) $10,000
C) $3,000
D) $0
Solutions:
| Question # 1 Answer: B | Question # 2 Answer: B | Question # 3 Answer: D | Question # 4 Answer: A | Question # 5 Answer: D |
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