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AICPA CPA Regulation

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Q: 1

Tom and Joan Moore, both CPAs, filed a joint 1994 federal income tax return showing $70,000 in taxable income. During 1994, Tom’s daughter Laura, age 16, resided with Tom. Laura had no income of her own and was Tom’s dependent. Determine the amount of income or loss, if any that should be included on page one of the Moores’ 1994 Form 1040. The Moores received $8,400 in gross receipts from their rental property during 1994. The expenses for the residential rental property were: AICPA CPA Regulation question

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Q: 2

DAC Foundation awarded Kent $75,000 in recognition of lifelong literary achievement. Kent was not required to render future services as a condition to receive the $75,000. What condition(s) must have been met for the award to be excluded from Kent's gross income? I. Kent was selected for the award by DAC without any action on Kent's part. II. Pursuant to Kent's designation, DAC paid the amount of the award either to a governmental unit or to a charitable organization.

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Q: 3
Under the uniform capitalization rules applicable to taxpayers with property acquired for resale, which of the following costs should be capitalized with respect to inventory if no exceptions have been met? AICPA CPA Regulation question
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Q: 4
Under the uniform capitalization rules applicable to property acquired for resale, which of the following costs should be capitalized with respect to inventory if no exceptions are met? AICPA CPA Regulation question
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Q: 5
On December 1, 1992, Michaels, a self-employed cash basis taxpayer, borrowed $100,000 to use in her business. The loan was to be repaid on November 30, 1993. Michaels paid the entire interest of $12,000 on December 1, 1992. What amount of interest was deductible on Michaels' 1993 income tax return?
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Q: 6
Baum, an unmarried optometrist and sole proprietor of Optics, buys and maintains a supply of eyeglasses and frames to sell in the ordinary course of business. In 1999, Optics had $350,000 in gross business receipts and its year-end inventory was not subject to the uniform capitalization rules. Baum's 1999 adjusted gross income was $90,000 and Baum qualified to itemize deductions. During 1999, Baum recorded the following information: Business expenses: AICPA CPA Regulation question What amount should Baum report as 1999 net earnings from self-employment?
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Q: 7

Tom and Joan Moore, both CPAs, filed a joint 1994 federal income tax return showing $70,000 in taxable income. During 1994, Tom’s daughter Laura, age 16, resided with Tom. Laura had no income of her own and was Tom’s dependent. Determine the amount of income or loss, if any that should be included on page one of the Moores’ 1994 Form 1040. The Moores received a stock dividend in 1994 from Ace Corp. They had the option to receive either cash or Ace stock with a fair market value of $900 as of the date of distribution. The par value of the stock was $500.

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Q: 8
Which one of the following statements is correct with regard to an individual taxpayer who has elected to amortize the premium on a bond that yields taxable interest?
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Q: 9
Rich is a cash basis self-employed air-conditioning repairman with 1993 gross business receipts of $20,000. Rich's cash disbursements were as follows: AICPA CPA Regulation question What amount should Rich report as net self-employment income?
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Q: 10
Fred Berk bought a plot of land with a cash payment of $40,000 and a mortgage of $50,000. In addition, Berk paid $200 for a title insurance policy. Berk's basis in this land is:
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