AICPA CPA Regulation CPA Exam Practice Test

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Total 69 questions

Question 1

Doris and Lydia are equal partners in the capital and profits of Agee & Nolan, but are otherwise unrelated. The following information pertains to 300 shares of Mast Corp. stock sold by Lydia to Agee & Nolan:

The amount of long-term capital loss that Lydia realized in 1988 on the sale of this stock was:



Answer : A

Question 2

On December 31, 1989, a building owned by Pine Corp. was totally destroyed by fire. The building had fire insurance coverage up to $500,000. Other pertinent information as of December 31, 1989 follows:

During January 1990, before the 1989 financial statements were issued, Pine received insurance proceeds of $500,000. On what amount should Pine base the determination of its loss on involuntary conversion?



Answer : B

Question 3

Fred Berk bought a plot of land with a cash payment of $40,000 and a mortgage of $50,000. In addition, Berk paid $200 for a title insurance policy. Berk's basis in this land is:



Answer : D

Question 4

For a cash basis taxpayer, gain or loss on a year-end sale of listed stock arises on the:



Answer : A

Question 5

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:



Answer : B

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Total 69 questions