4. Carmen is a full-time accounting professor at a local, private university. Of
ID: 2342564 • Letter: 4
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4. Carmen is a full-time accounting professor at a local, private university. Of the following items that she received in the current year, which one is partially taxable to her? a. Took several graduate-level liberal arts courses at her school at no charge, total value $7,500 b. Obtained a free membership at the university gym, total value $500 c. Employer paid 100% of her health insurance coverage, total value $6,000 d. Received a research grant from a corporation, total value $10,000 5. How do employees and the self-employed deduct unreimbursed business expenses in the current year? Employees For-AGI From-AGI For-AGI From-AGI Not Deductible For-AGI Self-Employed From-AGI For-AGI For-AGI From-AGI b. d. 6. Which of the following statements is false about deductions? a. Legitimate expenses of an illegal business are generally deductible. b. Business investigation expenses are fully deductible if you are in the same business as the one you are investigating, whether or not you undertake the new business. There is no deduction for political contributions. c. d. Hobby income is fully taxable, but hobby expenses are not deductible at all. 7. Mitch sold stock, which he had owned for five years and had a cost basis of $60,000, to Brian (his son) for S40,000. Brian held the stock for six months before selling it to his unrelated friend for $50,000. As a result of the sale, Brian will a. Report no gain or loss b. Report a $10,000 short-term capital loss c. Report a $10,000 short-term capital gain d. Report a $10,000 long-term capital loss e. Have his father report a $10,000 long-term capital loss.Explanation / Answer
4. Option D is the correct answer, Research grant she received will be partially taxable as she has earned it from a corporation and until and unless she spends the grant in her tuition fees or some education related , she had to pay the tax on the grant received as she is a professor in the college and as well as it was designated for living expense too.
5. Option D is correct For example, if your AGI is $80,000, you can only claim a deduction for the amount of your total miscellaneous expenses that exceed $1,600, or 2 percent of $80,000. If you have $1,800 in expenses, you'll get a $200 deduction. If your miscellaneous expenses don't add up to 2 percent of your AGI, they don't qualify for the deduction at all.
6. Option A is the correct option. Expenses of an illegal business are generally deductible as they are bein earned by other things than business thus it will be taxable.
7. Not sure about it. But Option a is correct as there is no gain or loss, the stock is sold for that specific value only.
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