1 Yozshunris

Acc 401 Final Paper Assignment

39. David is a college professor who does some consulting work on the side. He uses 25% of his home exclusively for the consulting practice. He is single and 63 years old. His AGI (without consideration of consulting income) is $45,000. Other information follows:

Income from consulting business $4,000

Consulting expenses other than home office 1,500

Total costs relating to home: 

Interest and taxes 6,500

Utilities 1,500

Maintenance and repairs 450

Depreciation (business part only) 1,500

43. Janet purchased her personal residence in 2000 for $250,000. In January 2009 she converted it to rental property. The fair market value at the time of conversion was $210,000. 

a. Determine the amount of cost recovery that can be taken in 2009:

b. Determine the amount of cost recovery that could be taken in 2009 if the fair market value of the property were $350,000:

Chapter 7

49. Ricardo acquired a warehouse for business purposes on August 30, 1992. The building cost $200,000. He took $133,333 of depreciation on the building, and then sold it for $350,000 on July 1, 2009. What is the amount and nature of Ricardo’s gain or loss on the sale of the warehouse?

51. In 2009, Juanita sold stock considered short-term for a gain of $875 and stock considered long-term for a loss of $2,400. She also had a $2,000 short-term loss carryover from 2008 and a $240 long-term loss carryover from 2008.

What amount will be shown as a short-term gain (loss) for 2009?

What amount will be shown as a long-term gain (loss) for 2009?

c. Will there be a carryover to 2010? If so, what is the nature and amount of the carryover?

Chapter 8

37. Matt and Marie own a vacation home at the beach. During the year, they rented the house for 42 days (6 weeks) at $890 per week and used it for personal use for 58 days. The total costs of maintaining the home are as follows:

Mortgage interest $4,200

Property taxes 700

Insurance 1,200

Utilities 3,200

Repairs 1,900

Depreciation 5,500

a. What is the proper tax treatment of this information on their tax return using the Tax Court


b. Is there an option for how to allocate the expense between personal and rental use? Explain

c. What is the proper tax treatment if Matt and Marie rented the house for only 14 days?

8. Janet owns a condominium at the beach. She incurs the following expenses:

Mortgage interest $1,300

Property taxes 800

Insurance 1,500

Utilities 1,800

Repairs 300

Depreciation 4,000

What is the proper treatment of these expenses as applied to the following situations? Use the Tax Court allocation method, if applicable.


THE PETERSAN’S2On March 13, 2014 Harold and Sarah Petersans’ came to the CS Accounting firm to inquiry about having someone complete their 2013 Individual Income Tax Return. After explaining the importance of filing and that the sixteenth amendment to the constitution in 1913 states that Congress shall have power to lay and collect on incomes, from whatever source derived without apportionment among the several states, and without regard to any census or enumeration, I scheduled an appointment for the Petersans’ to come back (Cruz, 2014). After meeting with the Petersans’ I found out that they had a life change event to occur and that they also had child care expenses to report. I agreed to complete the tax return for a fee of $325.The forms that I used to complete the filing of the Petersans’ tax return was Form 1040 U.S. Individual Income Tax Return, Form 1040V Payment Voucher, a Schedule A, Schedule

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