I need help with the following questions please. Thank you 1. Mike bought some real estate at the top of the real estate bubble. He paid $150,000 for a building lot for a vacation home. He decided to

I need help with the following questions please. Thank you

1. Mike bought some real estate at the top of the real estate bubble. He paid $150,000 for a building lot for a vacation home. He decided to sell the real estate when he decided he didn’t want to build a vacation in that location. He sold the real estate to his brother for $95,000, its appraised value.

1. ___ How much of Mike’s realized loss can he deduct, if any?

2. ___ Mike’s brother held the real estate for 5 years and then sold it for $175,000. How much gain must the brother report with respect to this sale?

A. $0 deductible

B. $80,000 recognized gain for the brother.

C. $25,000 recognized gain for the brother.

D. ($55,000) loss deductible

E. None of the other answers is correct

2. When Frank purchased his home 10 years ago, he paid $350,000 and financed the purchase with a $300,000 home mortgage. At a time when the principal on the mortgage was $263,175, Frank took advantage of increased home values and historically low interest rates to refinance his home mortgage. The new mortgage had a principal of $400,000 and a 3.5% interest rate. After paying off the original mortgage, Frank used the remaining loan proceeds to pay off high-interest credit card debt. To simplify things, assume Frank’s interest expense for the year was $14,000 (i.e., 3.5% * $400,000). How much of this $14,000, if any, can Frank deduct and what is the character of the deduction (i.e., for AGI or ID)?

A. $0

B. $9,211

C. $14,000

D. None of the other answers is correct

E. $12,711

3. In a year that Leonard had AGI of $100,000, he donated $250,000 worth of stock to Indiana University, where he earned his Ph.D. in experimental physics. He had bought the stock many years ago for $65,000. How much can Leonard deduct in the year he made this contribution? Assume Leonard’s AGI will remain at $100,000 each year for the foreseeable future. Note, if more than one answer is correct, do what is best for Leonard in the long-term.

A. $50,000

B. None of the other answers is correct

C. $0

D. $250,000

E. $30,000

F. $65,000

G. $20,000

4. Several years ago, Joyce bought series EE Savings Bonds with a cost of $20,000. The bonds are now worth $60,000. Joyce cashed in $30,000 worth of bonds (i.e., half the bonds) to pay for her son’s first year in college. The $30,000 proceeds were used as follows—$22,500 tuition & books; $7,500 room & board. Before considering the $20,000 interest income from these bonds, Joyce’s AGI on her head of household return was $59,200. How much, if any, of the interest income must be included in her gross income?

A. $14,000

B. $0

C. $9,500

D. $20,000

E. None of the other answers is correct

F. $5,000

5. Pete is an executive with Boeing, Inc. He accepted an assignment as President of Boeing’s Pacific Operations, stationed in Tokyo. He arrived in Tokyo on June 30, 2013, and was continuously present in Japan until he returned to the U.S. on January 1, 2015. His salary in 2013 was $350,000. What is Pete’s gross income for calendar year 2013?

A. $252,400

B. $0

C. $300,799

D. $350,000

E. None of the other answers is correct

6. In a year that Sheldon had AGI of $100,000, he donated $60,000 to his high school to help finance a large hadron collider that the physics department was buying. How much can Sheldon deduct in the year he made this contribution?

A. $30,000

B. $60,000

C. $50,000

D. $20,000

E. $0

F. None of the other answers is correct

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