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AICPA CPA Regulation Sample Questions:

1. Greller owns 100 shares of Arden Corp., a publicly-traded company, which Greller purchased on January
1 , 2001, for $10,000. On January 1, 2003, Arden declared a 2-for-1 stock split when the fair market value
(FMV) of the stock was $120 per share. Immediately following the split, the FMV of Arden stock was $62
per share. On February 1, 2003, Greller had his broker specifically sell the 100 shares of Arden stock
received in the split when the FMV of the stock was $65 per share. What is the basis of the 100 shares of
Arden sold?

A) $6,200
B) $6,500
C) $6,000
D) $5,000

2. 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:

A) $90,000
B) $40,200
C) $90,200
D) $40,000

3. Porter was unemployed for part of the year. Porter received $35,000 of wages, $4,000 from a state
unemployment compensation plan, and $2,000 from his former employer's company-paid supplemental
unemployment benefit plan. What is the amount of Porter's gross income?

A) $37,000
B) $35,000
C) $39,000
D) $41,000

4. In the current year Jensen had the following items:

What is Jensen's AGI for the current year?

A) $62,000
B) $44,000
C) $59,000
D) $84,000

5. Tom and Joan Moore, both CPAs, filed a joint 1994 federal income tax return showing $70,000 in taxable
income. During 1994, Tom's daughter Laura, age 16, resided with Tom. Laura had no income of her own
and was Tom's dependent.
Determine the amount of income or loss, if any that should be included on page one of the Moores' 1994
Form 1040.
In 1994, Joan received $1,300 in unemployment compensation benefits. Her employer made a $100
contribution to the unemployment insurance fund on her behalf.

A) $1,500
B) $55,000
C) $0
D) $50,000
E) $2,500
F) $25,000
G) $1,000
H) $10,000
I) $75,000
J) $1,250
K) $2,000
L) $3,000
M) $1,300
N) $500
O) $900

Solutions: