Recent Tax Developments (July-August 2013) (00424746)

This course provides you with an overview of recent tax developments and highlights planning tips and techniques to help you in your practice. On completion of this course, the user should be able to: list the new deductibles and contribution limits for health savings accounts for 2014; list the dollar limits on depreciation for vehicles purchased for business in 2013; identity a prohibited transaction for an IRA arising from outside financing; explain why assessing a company’s profitability now is important; list the tax actions that can be taken now to favorably impact 2013 income taxes; and discuss the steps to be taken now with respect to the employer shared responsibility under the Affordable Care Act

Final Exam > Question 1
What is the maximum contribution to a health savings account in 2014 for an individual with self-only coverage who is 48 years old?
XX$3,300
$4,300
$6,450
$7,450
Final Exam > Question 2
What is the maximum contribution to a health savings account in 2014 for an individual with self-only coverage who is 58 years old?
$3,300
XX$4,300
$6,450
$7,450
Final Exam > Question 3
In 2013, an individual buys a new light truck for her business, which she uses 100% for business. It cost $34,000. What is the dollar limit on depreciation for 2013?
$3,360
XX$11,360
$25,000
$34,000
Final Exam > Question 4
Which statement about inclusion amounts is correct?
The same inclusion amounts apply to passenger cars and light trucks.
The inclusion amounts for 2013 are much higher than for vehicles first leased in 2012.
The inclusion amounts apply regardless of the cost of the vehicle.
XXThe 2013 tables apply only to vehicles first leased in 2013.
Final Exam > Question 5
A couple with a negative amortization loan receives a Form 1098 from their mortgage company reporting gross interest of $35,000, net interest of $25,000, and a remaining balance of $95,000. How much interest can be deducted on Schedule A (assume the couple is not subject to the Pease phase-out):
XX$25,000
$35,000
$95,000
None of the above
Final Exam > Question 6
Which of the following statements about the adoption credit in 2013 is correct?
There are no dollar limits on income for claiming the credit
The credit for a special needs child is limited to actual expenses (up to the dollar limit of the credit)
XXA married person filing separately cannot take the credit (unless legally separately or living part from his/her spouse for the last six months of the year
The credit is refundable
Final Exam > Question 7
Which of the following is considered to be a prohibited transaction for IRA purposes?
Borrowing from it
Selling property to it
Buying property for personal use
XXAll of the above
Final Exam > Question 8
The IRS interest rate for the third quarter of 2013 on large corporate underpayments is:
0.5%
2%
3%
XX5%
Final Exam > Question 9
Which of the following tax breaks for businesses is set to expire at the end of 2013?
Sec. 179 deduction of up to $500,000
100% exclusion for the sale of qualified small business stock
Deduction for energy-efficient buildings
XXAll of the above
Final Exam > Question 10
Assume that a corporation in the food industry takes stock of its income and revenues year to date and sees that its revenues are far below what projections had been at the start of the year. Which of the following action should the business take?
XXReduce estimated taxes for the rest of 2013
Move to a new state
Set up a deferred compensation plan
Increase donations of food inventory