PLEASE ANSWER 151 - 160.

Question 151

Victor has a farm that he operates. He also derives $7,000 per year in income from nonfarm activities. What method or methods can Victor use to report the income from his nonfarm activities?

A.Victor can use the farm and nonfarm methods whichever is most beneficially to him

B.Victor must use the farm-only method for all income earned

C.Victor must use the nonfarm method for all income earned

D.Victor can use the nonfarm optional method for earnings that do not come from farming activities and only if he has used this method less than 5 years

Question 152

Which of the following business expenses related to advertising is not allowed as a deductible expense?

A.Promoting a business through paid advertisements on the internet

B.Business cards

C.Promotional items

D.Advertising with the intention of influencing political legislation

Question 153

Jessica paid $1,500 for electricity during the tax year. She used one-third of the electricity for personal purposes and two-thirds for farming. Under these circumstances, Jessica can deduct what amount of her electricity expense as a farm business expense?

A.$0

B.$500

C.$750

D.$1,000

Question 154

Phil used his rental property for personal use for 7 days and rented it for 63 days. In most cases, what percentage of his expenses are not rental expenses and cannot be deducted on Schedule E?

A.10%

B.20%

C.50%

D.90%

Question 155

Kai signs a 10-year lease to rent a property. In the first year, he receives $5,000 for the first year's rent and $5,000 as rent for the last year of the lease. What amount must Kai include in income in the first year?

A.$0

B.$2,500

C.$5,000

D.$10,000

Question 156

Larry rents his townhouse to Sue for $1,400 a month. At the beginning of the lease he asked for a $2,000 security deposit. When Sue moved out at the end of the lease Larry used $1,400 of the security deposit for the last months rent. What amount of the security deposit will Larry need to include in rental income on his tax return?

A.$0

B.$1,000

C.$1,400

D.$2,000

Question 157

Wendy is a single taxpayer with adjusted gross income of $92,300 for tax year 2016. She has rental income of $55,000 and rental expenses of $80,000. What can Wendy report on her tax return given this situation?

A.She can deduct $10,000 because her rental expenses exceeded her rental income

B.She can deduct $15,000 because her rental expenses exceeded her rental income

C.She can deduct $25,000 because her rental expenses exceeded her rental income

Question 158

A taxpayer should keep adequate records to prove his or her expenses or have sufficient evidence that will support his or her own statement. This documentary evidence ordinarily will be considered adequate if it shows all of the following except:

A.The amount of the expense

B.The date

C.The place

D.The method of payment

D.She can deduct $30,000 because her rental expenses exceeded her rental income

Question 159

A taxpayer can depreciate property under all of the following circumstances except:

A.He or she made a down payment to purchase rental property and assumed the previous owner's mortgage

B.He or she bought a new van that he or she will use only for his or her courier business and he or she will be making payments on the van over the next 5 years

C.He or she bears the burden of exhaustion of the capital investment in a leased property

D.He or she leases property from someone to use in his or her trade or business or for the production of income

Question 160

To figure the basis of property a taxpayer receives as a gift, it is necessary to have which of the following?

A.Adjusted basis to the donor just before it was given to the taxpayer

B.The Fair Market Value (FMV) at the time it was given to the taxpayer

C.Any gift tax paid on the property

D.All of the above