(2 points) Which parties must recognize a taxable gain (or loss) when a current partner sells her interest in the partnership to a new partner?

(1 point). For the following scenario, determine whether the related book-tax difference (if any) is favorable or unfavorable. Ramco Tooling purchased new equipment on January 1, Year 1 for $97,500. In Year 1, Ramco took $27,000 in Sec. 179 expense on the equipment and $15,000 in bonus depreciation on the equipment. In addition, it took $21,000 in regular MACRS depreciation on the equipment in Year 1. For book purposes, Ramco estimates the useful life of the equipment is 10 years and uses straight-line depreciation.

(2 points) Which of the following generally produces a taxable temporary difference in the year the activity occurs?

(4 points) Andrew invests $120,000 in a deposit account that pays out 8% interest annually (its pre-tax rate of return). If the taxpayer’s ordinary tax rate has a marginal tax rate of 24% and his long-term capital gains tax rate is 15%, what is his tax due on this investment this year?

(4 points) Green Bank Corporation claimed $250,000 in Sec. 179 expense and $250,000 in bonus depreciation in 2024 and the following is the remaining basis for each asset purchased in 2024 after applying Sec. 179 and bonus depreciation: Desks and chairs purchased on March 15, remaining basis: $175,000. Computers purchased on April 3, remaining basis: $165,000. What is the total depreciation expense for the taxpayer in 2024?

(1 point) Cost Recovery Methods – What cost recovery method (if any) should be used for costs from the purchase of a patent?

(4 points) Mel and Tara are married and file jointly for 2024. They earned $195,000 in total salaries together for the year working for an architecture and construction firm. They moved across the country when Tara was offered a new job opportunity within the company this year, incurring $7,500 in moving expenses. The moving expenses were not reimbursed by their employer. As part of the move, Mel and Tara had to sell their house this year. They had purchased the home in 2018 and after making some improvements to the home its adjusted tax basis at the time of sale was $310,000. They sold it for $575,000. They also paid $1,500 in interest on loans Mel took out to pay for his tuition and fees as an undergraduate architecture major. After the move, Mel had some health issues which required the couple to pay $15,000 in medical expenses (part for health insurance premiums and part deductibles and other out-of-pocket expenses for hospital care). Mel and Tara’s AGI for 2024 is:

Determining AGI (4 points): In 2024, Carlita moved across the country from the east coast to the west coast. She was moving because the advertising agency she worked for wanted her to relocate to work with a big new client the company had landed on the west coast. Her company reimbursed $9,000 of moving expenses (her total cost for the move), and her total wages for the year were $121,000. While living on the west coast, she began volunteering for a children’s hospital doing public relations for their office. She estimated her time volunteering at the hospital during the year was worth $6,100. She also paid $365 in professional dues to the American Association of Advertising Agencies at the beginning of the year, which was not reimbursed by her employer. Determine Carlita’s AGI for 2024.

Determining filing status for the taxpayer named for YEAR 2: Joann and David were married and filed jointly for 10 years. However, in YEAR 1 (last year), they divorced. In YEAR 2, Joann keeps up the home for herself and their son Miles who is 11, and David no longer lives with them. Joann has not remarried. Taxpayer of interest: Joann. (4 points)

Determining Gross Income (4 points): Patrick and Kelsey are married filing jointly in 2024. Patrick works at a car dealership, and Kelsey is a nurse at a hospital. During the year, they received $175,000 in total (together) for salaries from their employers. In addition, the hospital Kelsey worked for paid $4,750 for the employer’s portion of their medical and dental health insurance premiums. Finally, Kelsey’s grandmother passed away and left her $14,750. Determine the total recognizable gross income for Patrick and Kelsey in 2024.