JG Tax Group's Advanced Tax Quiz

1. Mr. and Mrs. Black purchased their primary residence in 1995 and lived in it until they sold it in the current year. They purchased the home for $250,000 and sold it for $650,000. Since their home was sold for more than the maximum exclusion of $500,000, they are required to report the sale of their home on their current year's tax return.

True
False

2. Jerry received two acres of land valued at $10,000 as a gift. The donor's adjusted basis was $12,000. Jerry subsequently sold the land for $20,000. For purposes of computing his gain, what is Jerry's basis in the land?

$8,000
$10,000
$12,000
$14,000


3. A married couple, who are both self employed, and work out of their home, purchased a new home in July 2008 for $420,000. In September 2008, they converted two bedrooms into office space where they meet clients in their home. In April 2010, they sold their home, on which they had taken $40,000 depreciation. Their home sold for $600,000. What amount of the gain is includable in their income on their joint return??

0
$222,000
$180,000
$40,000


4. Ho Jean is a U.S. citizen living and working in France for all of 2010. She received wages of $150,000, dividends of $10,000 and alimony of $20,000 in 2010. She decides to use the foreign earned income exclusion available to her and file Form 2555. What is the amount of Jean's foreign earned income before any limitations are applied?
   0
   $80,000
   $150,000
   $180,000
   
5. If you and your spouse each have separate businesses, you may each give a $25 business gift to the same person.

True
False

Dealing with IRS tax problems should't be as tricky as this challenging quiz. If you are in trouble with the IRS, contact JG Tax Group today to secure your financial future.