Chapter 1, Problem 2DQ

Michelle is an active participant in the rental condominium property she owns. During the year, the property generates a ($16.500) loss; however, Michelle has sufficient tax basis and at risk amounts to absorb the loss. if Michelle has $118.000 of salary. $10.300 of long-term capital gains, $3.300 of dividends, and no additional sources of income or deductions, how much loss can Michelle deduct? Mumple Choice O 10 losses from rental property are passive losses and can only be offset by passive income O $7,300 O $9.200 $16.500 ð None of the choices are connect

Joyce is a widowed taxpayer whose husband Willard passed away on March 31, 2020. Joyce and Willard had purchased a home for $215,000 on September 12, 2004, lived in the home as their main home until Willard's death. Joyce moved in with her daughter after Willard's death, and sold the home on November 30, 2020 , for $595,000. How much of the gain on the sale can Joyce exclude from taxable income? Select one: O a. $500,000, the maximum exclusion for an unmarried surviving spouse O b. $380,000, the amount of gain on the sale of the home O C. $250,000, the maximum exclusion amount for a single taxpayer O d. $0, because she moved out before she sold the home

Michelle is an active participant in the rental condominium property she owns. During the year, the property generates a ($19,500) loss; however, Michelle has sufficient tax basis and at-risk amounts to absorb the loss. If Michelle has $124,000 of salary, $10,900 of long-term capital gains, $3,900 of dividends, and no additional sources of income or deductions, how much loss can Michelle deduct?

Dave is terminally ill and does not expect to live much longer.  Pondering the consequences of his estate, he decides how to allocate his property to his nephews. He makes a gift of  appreciated property (i.e., fair market value exceeds adjusted basis) to George, and leaves appreciated property to Ian in his will.  Each of the properties has the same fair market value. From an income tax perspective, which nephew is his favorite? Which nephew is his least favorite?  Explain.

Doug and Tammy are not related and do not live together. Doug is employed and earns commission income. Tammy is an independent broker and earns commission income. Both maintain an office in their homes. Which of the following statements is false regarding the tax treatment of their incomes for 2020? (a) Tammy can incur a non-capital loss, but Doug cannot. (b) Tammy and Doug can deduct a portion of their property tax and house insurance (c) Tammy can deduct a portion of her home mortgage interest, but Doug cannot. (d) Tammy and Doug can claim CCA on their computers.

Jennifer recently gave a check for $30,000 and securities with a fair market value of $200,000 to her former husband pursuant to a divorce. The $30,000 represents alimony and the securities were transferred pursuant to the property settlement. The property settlement is nontaxable to her former husband. What tax issues should Jennifer consider?

Melissa sold some of her Bitcoin in 2021 for a $200,000 long-term capital gain, bringing her total taxable income to $450,000.  What is the tax on this capital gain if she files her return as Head of Household?

Delilah and George live in Florida and pay real estate taxes on the following properties: Their personal home - $8,600; an empty lot by the lake that they use to camp on for vacations -$2,610; farmland they rent to a local farmer - $1,200; a house that they rent out - $2,950. What is the amount of real estate taxes they can claim as an itemized deduction on Schedule A? Select one: a. $15,360 b. $11,210 c. $10,000 d. $8,600

Christian wants to transfer as much as possible to his 4 adult married children (including spouses) and 13 minor grandchildren without using any unified transfer tax credit. a. What amount should Christian transfer to accomplish his tax goal without using any unified transfer tax credit? b. What if Christian's spouse, Mia, joins in the gifts? They can gift $__--- without using any unified transfer tax credit. c. Express your computations for parts (a) and (b) as a Microsoft Excel formula.