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| Section | Weight | Objectives |
|---|---|---|
| Topic 1: Business Law | 15-25% | - Agency, contracts, and debtor-creditor relationships - Business structures and federal business regulations - Legal duties and responsibilities in business transactions |
| Topic 2: Federal Taxation of Property Transactions | 5-15% | - Gains and losses on disposition of assets - Basis, cost recovery (depreciation and amortization) |
| Topic 3: Ethics, Professional Responsibilities and Federal Tax Procedures | 10-20% | - Licensing and disciplinary systems for CPA practice - Federal tax procedures, disclosures, penalties, and appeals - Ethics and responsibilities in tax practice (Treasury Department Circular 230) |
| Topic 4: Federal Taxation of Individuals | 22-32% | - Tax filing requirements and procedures - Adjustments, deductions, exemptions and credits - Individual taxable income and tax compliance |
| Topic 5: Federal Taxation of Entities | 23-33% | - Tax compliance for corporations, partnerships, LLCs, and S corporations - Entity-level tax planning and reporting requirements |
Conner purchased 300 shares of Zinco stock for $30,000 in 1980. On May 23, 1994, Conner sold all the
stock to his daughter Alice for $20,000, its then fair market value. Conner realized no other gain or loss
during 1994. On July 26, 1994, Alice sold the 300 shares of Zinco for $25,000.
What was Alice's recognized gain or loss on her sale?
Correct Answer: C 🗳️
Explanation: Only visible for Exams4Collection members. You can sign-up / login (it's free).
In evaluating the hierarchy of authority in tax law, which of the following carries the greatest authoritative
value for tax planning of transactions?
Correct Answer: C 🗳️
Explanation: Only visible for Exams4Collection members. You can sign-up / login (it's free).
Which of the following statements is the best definition of real property?
Correct Answer: C 🗳️
The uniform capitalization method must be used by:
I. Manufacturers of tangible personal property.
II. Retailers of personal property with $2 million dollars in average annual gross receipts for the 3
preceding years.
Correct Answer: C 🗳️
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Hall, a divorced person and custodian of her 12-year old child, filed her 1990 federal income tax return as
head of a household. She submitted the following information to the CPA who prepared her 1990 return:
. In 1990, Hall sold an antique that she bought in 1980 to display in her home. Hall paid $800 for the
antique and sold it for $1,400, using the proceeds to pay a court ordered judgment.
The $600 gain that Hall realized on the sale of the antique should be treated as:
Correct Answer: A 🗳️
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