121 Midterm 2 Fall 12
University of California Prof. Alan Cerf
Haas School of Business Midterm 2 exam, v. A
UGBA 121 Fall 2012
Name ______________Q & A_______________________ Date ______________
Please sign the following:
I pledge that I will not receive help from anyone, nor will I give help to anyone during this exam.
___________________________________ _______________________________
SID student’s signature
For problems 1-3, write answers on exam and show calculations to justify your answers.
Question I. 10 pts
Rod is employed as an auditor by a CPA firm. On most days, he commutes by auto from his home to the office (18 miles round trip). During one month, however, he has an extensive audit assignment closer to home. For this engagement, Rod drives directly from home to the client’s premises and back (30 miles round trip). How much, if any, of this mileage can Rod claim as a deduction?
(Show calculations.)
ANS:
30 miles for each day of the audit assignment.
Question 2. 25 pts (Show calculations for each of three parts.)
Virginia had AGI of $100,000 in 2013. She donated Amber Corporation stock with a basis of $9,000 to a qualified charitable organization on July 5, 2013.
a.
What is the amount of Virginia’s deduction, assuming that she purchased the stock on December 4, 2012, and the stock had a fair market value of $16,000 when she made the donation?
b.
Assume the same facts as in a., except that Virginia purchased the stock on July 1, 2003.
c.
Assume the same facts as in a., except that the stock had a fair market value of $5,000 (rather than $16,000) when Virginia donated it to the charity.
ANS:
General discussion. The deduction for a contribution of capital gain property is based on the fair market value, while the deduction for a contribution of ordinary income property is equal to the lesser of the adjusted basis or the fair market value.
a.
Because Virginia did not hold the stock for the long-term holding period (December 4,
Haas School of Business Midterm 2 exam, v. A
UGBA 121 Fall 2012
Name ______________Q & A_______________________ Date ______________
Please sign the following:
I pledge that I will not receive help from anyone, nor will I give help to anyone during this exam.
___________________________________ _______________________________
SID student’s signature
For problems 1-3, write answers on exam and show calculations to justify your answers.
Question I. 10 pts
Rod is employed as an auditor by a CPA firm. On most days, he commutes by auto from his home to the office (18 miles round trip). During one month, however, he has an extensive audit assignment closer to home. For this engagement, Rod drives directly from home to the client’s premises and back (30 miles round trip). How much, if any, of this mileage can Rod claim as a deduction?
(Show calculations.)
ANS:
30 miles for each day of the audit assignment.
Question 2. 25 pts (Show calculations for each of three parts.)
Virginia had AGI of $100,000 in 2013. She donated Amber Corporation stock with a basis of $9,000 to a qualified charitable organization on July 5, 2013.
a.
What is the amount of Virginia’s deduction, assuming that she purchased the stock on December 4, 2012, and the stock had a fair market value of $16,000 when she made the donation?
b.
Assume the same facts as in a., except that Virginia purchased the stock on July 1, 2003.
c.
Assume the same facts as in a., except that the stock had a fair market value of $5,000 (rather than $16,000) when Virginia donated it to the charity.
ANS:
General discussion. The deduction for a contribution of capital gain property is based on the fair market value, while the deduction for a contribution of ordinary income property is equal to the lesser of the adjusted basis or the fair market value.
a.
Because Virginia did not hold the stock for the long-term holding period (December 4,