Question 1

What is the purpose of a citator?

Accepted Answer

Citators give a history of the

Question 2

For charitable contribution purposes, capital gain property includes property which, if sold, would produce a long- term capital gain.

Accepted Answer

A) True 
 B)False

Question 3

When an involuntary conversion is due to the condemnation of real property held for productive use in a trade or business or for investment, the replacement period will end three years after the close of the first tax year in which any part of the gain is realized.

Accepted Answer

A) True 
 B)False

Question 4

Yael exchanges an office building worth $150,000 for investment land worth $175,000. Yael also transferred stock worth $25,000 to the other party. Yael's adjusted basis in the building and stock is $180,000 and $11,000, respectively. How much gain or loss will Yael recognize on the exchange?

Accepted Answer

A)  $14,000 
B)  ($30,000) 
C)  ($16,000) 
D)  $0 
A)  $14,000 
B)  ($30,000) 
C)  ($16,000) 
D)  $0

Question 5

Assume you plan to volunteer at a Volunteer Income Tax Assistance (VITA) program for low income taxpayers and wish to prepare so you can help your clients achieve the maximum tax savings. Briefly discuss tax credits with which you should become familiar.

Accepted Answer

For low- income workers, the earned inco

Question 6

To be considered a Section 1202 gain, the stock being sold must meet all of the following characteristics except

Accepted Answer

A)  at least 50% of the value of the corporation's assets must be used in the active conduct of one or more qualified trades or businesses. 
B)  the stock must be held more than five years. 
C)  the stock must be issued after August 10, 1993. 
D)  the corporation which issued the stock must be a C corporation. 
A)  at least 50% of the value of the corporation's assets must be used in the active conduct of one or more qualified trades or businesses. 
B)  the stock must be held more than five years. 
C)  the stock must be issued after August 10, 1993. 
D)  the corporation which issued the stock must be a C corporation.

Question 7

In 2018, Carlos filed his 2017 state income tax return and paid taxes of $800. Also in 2018, Carlos's employer withheld state income tax of $750 from Carlos's salary. In 2019, Carlos filed his 2018 state income tax return and paid an additional $600 of state income tax due for 2018. How much state income tax can Carlos deduct on his 2018 federal income tax return for state income tax?

Accepted Answer

A)  $1,400 
B)  $1,550 
C)  $1,350 
D)  $2,150 
A)  $1,400 
B)  $1,550 
C)  $1,350 
D)  $2,150

Question 8

Which of the following individuals is most likely to be audited?

Accepted Answer

A)  Marvella has a $145,000 net loss from her unincorporated business (a horse farm). She also received $950,000 salary as a CEO of a corporation. 
B)  Jerry is a school teacher with two children earning $55,000 a year. He also receives $200 in interest income on a bank account. 
C)  Melvin is retired and receives Social Security benefits. 
D)  Lola has AGI of $35,000 from wages and uses the standard deduction. 
A)  Marvella has a $145,000 net loss from her unincorporated business (a horse farm). She also received $950,000 salary as a CEO of a corporation. 
B)  Jerry is a school teacher with two children earning $55,000 a year. He also receives $200 in interest income on a bank account. 
C)  Melvin is retired and receives Social Security benefits. 
D)  Lola has AGI of $35,000 from wages and uses the standard deduction.

Question 9

Jamahl has a 65% interest in a partnership. Jamahl sells land to the partnership for $70,000. Prior to the sale, the land had a FMV of $70,000 and an adjusted basis of $90,000 to Jamahl. Due to the sale, Jamahl will recognize

Accepted Answer

A)  a gain of $20,000. 
B)  $0, and he will not have any carryover loss. 
C)  $0, but he will have a carryover loss of $20,000. 
D)  a loss of $20,000. 
A)  a gain of $20,000. 
B)  $0, and he will not have any carryover loss. 
C)  $0, but he will have a carryover loss of $20,000. 
D)  a loss of $20,000.

Question 10

A building used in a trade or business is a capital asset.

Accepted Answer

A) True 
 B)False

Question 11

Sarah, who is single, maintains a home in which she, her 15- year- old brother, and her 21- year- old niece live. Sarah provides the majority of the support for her brother, her niece, and her cousin, age 18, who is enrolled full- time at the university and lives in an apartment. While the niece and cousin have no income, her brother has a part- time job and earns $4,500 per year. How many dependents may Sarah claim?

Accepted Answer

A)  1 
B)  2 
C)  3 
D)  None 
A)  1 
B)  2 
C)  3 
D)  None

Question 12

CPA Associates, a cash- basis partnership with a calendar tax year, signs a contract for a 30- month subscription to an online tax research service, effective as of November 1. The firm pays the full $15,000 subscription bill on the November 1, 2018 subscription start date. For 2018 the firm can deduct

Accepted Answer

A)  $15,000. 
B)  $1,000. 
C)  $2,000. 
D)  $7,500. 
A)  $15,000. 
B)  $1,000. 
C)  $2,000. 
D)  $7,500.

Question 13

George transferred land having a $170,000 FMV and a $60,000 adjusted basis, which is subject to a $150,000 mortgage in exchange for a one- third interest in the GEF Partnership. The partnership owes no other liabilities. George, Elena, and Franz share profits and losses equally and each has a one- third interest in partnership capital. The basis to the partnership of the land transferred by George is

Accepted Answer

A)  $170,000. 
B)  $60,000. 
C)  $20,000. 
D)  $110,000. 
A)  $170,000. 
B)  $60,000. 
C)  $20,000. 
D)  $110,000.

Question 14

Raul and Jenna are married and are both working. They are both over age 50. Jenna participates in her employer's Sec. 401(k) plan and makes the maximum contribution and enjoys a company matching contribution. Raul's employer does not maintain a retirement plan so he would like to save as much as possible in a tax- advantaged manner for retirement. They expect to report $193,000 of AGI for 2018.
a. What is the maximum amount that Raul can contribute to a traditional IRA and how much can he deduct?
b. What is the maximum amount that Raul can contribute to a Roth IRA and how much can he deduct?
c. How could Raul contribute to both the traditional IRA and Roth IRA to maximize current and future tax savi

Accepted Answer

a. Raul can contribute $6,500 to a tradi

Question 15

Erin's records reflect the following information: 1. Paid $200 dues to a fraternal organization (such as the Elks Club).
2) Donated stock having a fair market value of $3,500 to a qualified charitable organization. She purchased the st years earlier for $3,000.
3) Paid $1,600 cash to qualified public charitable organizations.
Erin's adjusted gross income for this year was $50,000. What is the amount of her charitable contribution deducti for the year?

Accepted Answer

A)  $4,600 
B)  $5,100 
C)  $4,800 
D)  $5,300 
A)  $4,600 
B)  $5,100 
C)  $4,800 
D)  $5,300

Question 16

A new start- up corporation is formed by three individuals. They expect the corporation will experience losses in its first few years. The shareholders will prefer to have the corporation taxed as a C corporation rather than making an S election.

Accepted Answer

A) True 
 B)False

Question 17

Erin, Sarah, and Timmy are equal partners in EST Partnership. Sarah also owns 40% of Elton Corporation. The remaining shareholders of Elton Corporation are: Erin (24%) and Sarah's uncle (36%). What percent ownership does Sarah directly or constructively own in Elton Corporation?

Accepted Answer

A)  100% 
B)  76% 
C)  64% 
D)  40% 
A)  100% 
B)  76% 
C)  64% 
D)  40%

Question 18

A taxpayer who uses the cash method in computing gross income from his or her business must use the cash method in computing expenses of such business.

Accepted Answer

A) True 
 B)False

Question 19

If an individual is classified as an employee, the employer is required to withhold the employee's share of the FICA tax and to provide a matching amount.

Accepted Answer

A) True 
 B)False

Question 20

Ms. Marple's books and records for 2018 reflect the following information:   What is the amount Ms. Marple should include in her gross income in 2018?

Accepted Answer

A)  $68,000 
B)  $67,000 
C)  $65,000 
D)  $66,000 
A)  $68,000 
B)  $67,000 
C)  $65,000 
D)  $66,000

What is the purpose of a citator?

For charitable contribution purposes, capital gain property includes property which, if sold, would produce a long- term capital gain.

When an involuntary conversion is due to the condemnation of real property held for productive use in a trade or business or for investment, the replacement period will end three years after the close of the first tax year in which any part of the gain is realized.

Yael exchanges an office building worth $150,000 for investment land worth $175,000. Yael also transferred stock worth $25,000 to the other party. Yael's adjusted basis in the building and stock is $180,000 and $11,000, respectively. How much gain or loss will Yael recognize on the exchange?

Assume you plan to volunteer at a Volunteer Income Tax Assistance (VITA) program for low income taxpayers and wish to prepare so you can help your clients achieve the maximum tax savings. Briefly discuss tax credits with which you should become familiar.

To be considered a Section 1202 gain, the stock being sold must meet all of the following characteristics except

Which of the following individuals is most likely to be audited?

Jamahl has a 65% interest in a partnership. Jamahl sells land to the partnership for $70,000. Prior to the sale, the land had a FMV of $70,000 and an adjusted basis of $90,000 to Jamahl. Due to the sale, Jamahl will recognize

A building used in a trade or business is a capital asset.

A new start- up corporation is formed by three individuals. They expect the corporation will experience losses in its first few years. The shareholders will prefer to have the corporation taxed as a C corporation rather than making an S election.

Erin, Sarah, and Timmy are equal partners in EST Partnership. Sarah also owns 40% of Elton Corporation. The remaining shareholders of Elton Corporation are: Erin (24%) and Sarah's uncle (36%). What percent ownership does Sarah directly or constructively own in Elton Corporation?

A taxpayer who uses the cash method in computing gross income from his or her business must use the cash method in computing expenses of such business.

If an individual is classified as an employee, the employer is required to withhold the employee's share of the FICA tax and to provide a matching amount.

Ms. Marple's books and records for 2018 reflect the following information: What is the amount Ms. Marple should include in her gross income in 2018?

Tax Research

Corporate Formations and Capital Structure

The Corporate Income Tax

Corporate Nonliquidating Distributions

Other Corporate Tax Levies

Corporate Liquidating Distributions

Corporate Acquisitions and Reorganizations

Consolidated Tax Returns

Partnership Formation and Operation

Special Partnership Issues

S Corporations

The Gift Tax

The Estate Tax

Income Taxation of Trusts and Estates

Administrative Procedures

Filters

Exam 16: Tax Deductions and Travel Expenses for Employees and Self-Employed Individuals

What is the purpose of a citator?

For charitable contribution purposes, capital gain property includes property which, if sold, would produce a long- term capital gain.

When an involuntary conversion is due to the condemnation of real property held for productive use in a trade or business or for investment, the replacement period will end three years after the close of the first tax year in which any part of the gain is realized.

Yael exchanges an office building worth $150,000 for investment land worth $175,000. Yael also transferred stock worth $25,000 to the other party. Yael's adjusted basis in the building and stock is $180,000 and $11,000, respectively. How much gain or loss will Yael recognize on the exchange?

Assume you plan to volunteer at a Volunteer Income Tax Assistance (VITA) program for low income taxpayers and wish to prepare so you can help your clients achieve the maximum tax savings. Briefly discuss tax credits with which you should become familiar.

To be considered a Section 1202 gain, the stock being sold must meet all of the following characteristics except

Which of the following individuals is most likely to be audited?

Jamahl has a 65% interest in a partnership. Jamahl sells land to the partnership for $70,000. Prior to the sale, the land had a FMV of $70,000 and an adjusted basis of $90,000 to Jamahl. Due to the sale, Jamahl will recognize

A building used in a trade or business is a capital asset.

A new start- up corporation is formed by three individuals. They expect the corporation will experience losses in its first few years. The shareholders will prefer to have the corporation taxed as a C corporation rather than making an S election.

Erin, Sarah, and Timmy are equal partners in EST Partnership. Sarah also owns 40% of Elton Corporation. The remaining shareholders of Elton Corporation are: Erin (24%) and Sarah's uncle (36%). What percent ownership does Sarah directly or constructively own in Elton Corporation?

A taxpayer who uses the cash method in computing gross income from his or her business must use the cash method in computing expenses of such business.

If an individual is classified as an employee, the employer is required to withhold the employee's share of the FICA tax and to provide a matching amount.

Ms. Marple's books and records for 2018 reflect the following information: What is the amount Ms. Marple should include in her gross income in 2018?

Tax Research

Corporate Formations and Capital Structure

The Corporate Income Tax

Corporate Nonliquidating Distributions

Other Corporate Tax Levies

Corporate Liquidating Distributions

Corporate Acquisitions and Reorganizations

Consolidated Tax Returns

Partnership Formation and Operation

Special Partnership Issues

S Corporations

The Gift Tax

The Estate Tax

Income Taxation of Trusts and Estates

Administrative Procedures

Filters