Question 1

When a residence is rented for less than 15 days during the year,the rental income is excluded from gross income.

Accepted Answer

A) True 
 B)False

Question 2

Earnings on nondeductible IRA contributions are allowed to accumulate tax-free until they are withdrawn.

Accepted Answer

A) True 
 B)False

Question 3

In some cases,a taxpayer may deduct an otherwise allowable contribution to an IRA,even though the contribution is made after the close of the tax year.

Accepted Answer

A) True 
 B)False

Question 4

Barrett is a 45-year-old political commentator who has self-employed net earned income of $150,000 in 2013.What is the maximum amount he can contribute to his simplified employee pension SEP)for the year?

Accepted Answer

$30,000.His contribu

Question 5

Ben is a 19-year-old single software inventor earning $200,000 a year and is not covered by a pension plan at work.How much can he put into a Roth IRA in 2013?

Accepted Answer

$0.He is over the in

Question 6

Arnold purchased two rental properties 6 years ago.He actively participates in their management.During 2013,Arnold had income of $22,000 from one of the rentals.He had a loss from the other rental of $32,000,as well as salary income of $35,000,and dividend income of $2,000.What is Arnold's net passive income or loss deduction?

Accepted Answer

A) $8,000 net loss 
B) $10,000 net loss 
C) $22,000 net loss 
D) $32,000 net loss 
E) None of the above 
A) $8,000 net loss 
B) $10,000 net loss 
C) $22,000 net loss 
D) $32,000 net loss 
E) None of the above

Question 7

Without regard to their involvement in the management of the rental property,individual taxpayers may deduct up to $25,000 of rental real estate losses against other income,provided their income does not exceed certain limits.

Accepted Answer

A) True 
 B)False

Question 8

The expenses associated with the rental of a residence used for both personal and rental purposes are subject to three possible tax treatments.Which of the following is not included as one of the three?

Accepted Answer

A) If a residence is rented for fewer than 15 days during the year the rental period is disregarded and the residence is regarded as a personal residence for tax purposes. 
B) If the residence is rented for 15 days or more and is used for personal purposes for not more than 14 days or 10 percent of the days rented,whichever is greater,the residence is treated as rental property. 
C) If the residence is rented for 15 days or more and is used for personal purposes for not more than 14 days or 10 percent of the days rented,whichever is greater,the residence is treated as a personal residence for tax purposes. 
D) If the residence is rented for 15 days or more and is used for personal purposes for more than 14 days or 10 percent of the days rented,whichever is greater,allocable rental expenses are allowed only to the extent of rental income. 
A) If a residence is rented for fewer than 15 days during the year the rental period is disregarded and the residence is regarded as a personal residence for tax purposes. 
B) If the residence is rented for 15 days or more and is used for personal purposes for not more than 14 days or 10 percent of the days rented,whichever is greater,the residence is treated as rental property. 
C) If the residence is rented for 15 days or more and is used for personal purposes for not more than 14 days or 10 percent of the days rented,whichever is greater,the residence is treated as a personal residence for tax purposes. 
D) If the residence is rented for 15 days or more and is used for personal purposes for more than 14 days or 10 percent of the days rented,whichever is greater,allocable rental expenses are allowed only to the extent of rental income.

Question 9

Steven is 27 years old and has a total AGI of $110,000 in 2013.In 2013,he gets pneumonia and has a medical bill that totals $7,500.He withdraws $7,500 from his traditional IRA to pay for the bill.Which of the following is true?

Accepted Answer

A) He is not subject to penalties on the IRA withdrawal because it was for medical expenses. 
B) He is not subject to penalties on the IRA withdrawal because he was disabled by pneumonia for 2 weeks. 
C) He is subject to penalties on the IRA withdrawal because a person may not take a withdrawal from a traditional IRA until they are 59 ½ years old no matter what. 
D) He is subject to penalties on the IRA withdrawal because the medical bill was not greater than 10 percent of his AGI. 
E) None of the above is correct. 
A) He is not subject to penalties on the IRA withdrawal because it was for medical expenses. 
B) He is not subject to penalties on the IRA withdrawal because he was disabled by pneumonia for 2 weeks. 
C) He is subject to penalties on the IRA withdrawal because a person may not take a withdrawal from a traditional IRA until they are 59 ½ years old no matter what. 
D) He is subject to penalties on the IRA withdrawal because the medical bill was not greater than 10 percent of his AGI. 
E) None of the above is correct.

Question 10

What is the deadline for making a contribution to traditional IRA or a Roth IRA for 2013?

Accepted Answer

A) April 15,2014 
B) December 31,2013 
C) April 15,2013 
D) October 15,2014 
A) April 15,2014 
B) December 31,2013 
C) April 15,2013 
D) October 15,2014

Question 11

Since a contribution to an IRA is a voluntary action,a taxpayer may withdraw amounts from an IRA at any time without penalty.

Accepted Answer

A) True 
 B)False

Question 12

If under 50 years of age,a taxpayer may make a contribution to an IRA,subject to the earned income limitation and the $5,500 annual limitation.

Accepted Answer

A) True 
 B)False

Question 13

Subject to the annual dollar limitation and the earned income limitation,deductible IRA contributions are allowed for all taxpayers who do not participate in a qualified retirement plan.

Accepted Answer

A) True 
 B)False

Question 14

Serissa Corporation has a Section 401k)plan for its employees.The plan provides for a maximum contribution equal to 15 percent of the employees' salaries.Scott,an employee of Serissa Corporation,elects to contribute the maximum amount possible to the Section 401k)plan.During 2013,Scott has
$40,000 in wages.For 2013,what is the maximum amount that Scott may contribute to the plan on a tax- deferred basis?

Accepted Answer

$6,000,les

Question 15

Polly,age 45,participates in her employer's Section 401k)plan which allows employees to contribute up to 15 percent of their salary.Her annual salary is $100,000 in 2013.What is the maximum she can contribute to this plan on a tax-deferred basis under a salary reduction agreement?

Accepted Answer

A) $20,500 
B) $15,000 
C) $17,500 
D) $20,000 
E) None of the above 
A) $20,500 
B) $15,000 
C) $17,500 
D) $20,000 
E) None of the above

Question 16

Nancy has active modified adjusted gross income before passive losses of $125,000.She has a loss of $10,000 on a rental property she actively manages.How much of the loss is she allowed to deduct against the $125,000 of other income?

Accepted Answer

A) None 
B) $2,500 
C) $5,000 
D) $10,000 
A) None 
B) $2,500 
C) $5,000 
D) $10,000

Question 17

John is a single 40-year-old landscape architect earning $125,000 a year and is not covered by a pension plan at work.How much can he put into a Traditional IRA in 2013?

Accepted Answer

$5,500.He is not covered by a

Question 18

Passive losses of one activity may not be used to offset passive income from another activity.

Accepted Answer

A) True 
 B)False

Question 19

Karen is 48 and a single taxpayer,with income of $90,000,all from salary.She is covered by a retirement plan at work.Can Karen make a tax deductible contribution to an IRA? Explain.

Accepted Answer

No.Employees who are covered by qualifie

Question 20

Tony makes a maximum contribution to his employer's 401k)plan.He earns $60,000 a year.How much income is he allowed to contribute to the plan for 2013?

Accepted Answer

$17,500,the amount l

When a residence is rented for less than 15 days during the year,the rental income is excluded from gross income.

Earnings on nondeductible IRA contributions are allowed to accumulate tax-free until they are withdrawn.

In some cases,a taxpayer may deduct an otherwise allowable contribution to an IRA,even though the contribution is made after the close of the tax year.

Barrett is a 45-year-old political commentator who has self-employed net earned income of $150,000 in 2013.What is the maximum amount he can contribute to his simplified employee pension SEP)for the year?

Ben is a 19-year-old single software inventor earning $200,000 a year and is not covered by a pension plan at work.How much can he put into a Roth IRA in 2013?

Without regard to their involvement in the management of the rental property,individual taxpayers may deduct up to $25,000 of rental real estate losses against other income,provided their income does not exceed certain limits.

The expenses associated with the rental of a residence used for both personal and rental purposes are subject to three possible tax treatments.Which of the following is not included as one of the three?

Steven is 27 years old and has a total AGI of $110,000 in 2013.In 2013,he gets pneumonia and has a medical bill that totals $7,500.He withdraws $7,500 from his traditional IRA to pay for the bill.Which of the following is true?

What is the deadline for making a contribution to traditional IRA or a Roth IRA for 2013?

Since a contribution to an IRA is a voluntary action,a taxpayer may withdraw amounts from an IRA at any time without penalty.

If under 50 years of age,a taxpayer may make a contribution to an IRA,subject to the earned income limitation and the $5,500 annual limitation.

Subject to the annual dollar limitation and the earned income limitation,deductible IRA contributions are allowed for all taxpayers who do not participate in a qualified retirement plan.

Polly,age 45,participates in her employer's Section 401k)plan which allows employees to contribute up to 15 percent of their salary.Her annual salary is $100,000 in 2013.What is the maximum she can contribute to this plan on a tax-deferred basis under a salary reduction agreement?

Nancy has active modified adjusted gross income before passive losses of $125,000.She has a loss of $10,000 on a rental property she actively manages.How much of the loss is she allowed to deduct against the $125,000 of other income?

John is a single 40-year-old landscape architect earning $125,000 a year and is not covered by a pension plan at work.How much can he put into a Traditional IRA in 2013?

Passive losses of one activity may not be used to offset passive income from another activity.

Karen is 48 and a single taxpayer,with income of $90,000,all from salary.She is covered by a retirement plan at work.Can Karen make a tax deductible contribution to an IRA? Explain.

Tony makes a maximum contribution to his employer's 401k)plan.He earns $60,000 a year.How much income is he allowed to contribute to the plan for 2013?

The Individual Income Tax Return

Gross Income and Exclusions

Business Income and Expenses, Part I

Itemized Deductions and Other Incentives

Credits and Special Taxes

Accounting Periods and Methods and Depreciation

Capital Gains and Losses

Withholding, Estimated Payments, and Payroll Taxes

Partnership Taxation

The Corporate Income Tax

Tax Administration and Tax Planning

Filters

Exam 4: Business Income and Expenses, Part II

When a residence is rented for less than 15 days during the year,the rental income is excluded from gross income.

Earnings on nondeductible IRA contributions are allowed to accumulate tax-free until they are withdrawn.

In some cases,a taxpayer may deduct an otherwise allowable contribution to an IRA,even though the contribution is made after the close of the tax year.

Barrett is a 45-year-old political commentator who has self-employed net earned income of $150,000 in 2013.What is the maximum amount he can contribute to his simplified employee pension SEP)for the year?

Ben is a 19-year-old single software inventor earning $200,000 a year and is not covered by a pension plan at work.How much can he put into a Roth IRA in 2013?

Without regard to their involvement in the management of the rental property,individual taxpayers may deduct up to $25,000 of rental real estate losses against other income,provided their income does not exceed certain limits.

The expenses associated with the rental of a residence used for both personal and rental purposes are subject to three possible tax treatments.Which of the following is not included as one of the three?

Steven is 27 years old and has a total AGI of $110,000 in 2013.In 2013,he gets pneumonia and has a medical bill that totals $7,500.He withdraws $7,500 from his traditional IRA to pay for the bill.Which of the following is true?

What is the deadline for making a contribution to traditional IRA or a Roth IRA for 2013?

Since a contribution to an IRA is a voluntary action,a taxpayer may withdraw amounts from an IRA at any time without penalty.

If under 50 years of age,a taxpayer may make a contribution to an IRA,subject to the earned income limitation and the $5,500 annual limitation.

Subject to the annual dollar limitation and the earned income limitation,deductible IRA contributions are allowed for all taxpayers who do not participate in a qualified retirement plan.

Polly,age 45,participates in her employer's Section 401k)plan which allows employees to contribute up to 15 percent of their salary.Her annual salary is $100,000 in 2013.What is the maximum she can contribute to this plan on a tax-deferred basis under a salary reduction agreement?

Nancy has active modified adjusted gross income before passive losses of $125,000.She has a loss of $10,000 on a rental property she actively manages.How much of the loss is she allowed to deduct against the $125,000 of other income?

John is a single 40-year-old landscape architect earning $125,000 a year and is not covered by a pension plan at work.How much can he put into a Traditional IRA in 2013?

Passive losses of one activity may not be used to offset passive income from another activity.

Karen is 48 and a single taxpayer,with income of $90,000,all from salary.She is covered by a retirement plan at work.Can Karen make a tax deductible contribution to an IRA? Explain.

Tony makes a maximum contribution to his employer's 401k)plan.He earns $60,000 a year.How much income is he allowed to contribute to the plan for 2013?

The Individual Income Tax Return

Gross Income and Exclusions

Business Income and Expenses, Part I

Itemized Deductions and Other Incentives

Credits and Special Taxes

Accounting Periods and Methods and Depreciation

Capital Gains and Losses

Withholding, Estimated Payments, and Payroll Taxes

Partnership Taxation

The Corporate Income Tax

Tax Administration and Tax Planning

Filters