Question 1

All of the following items are deductions for adjusted gross income except

Accepted Answer

A)  state and local income taxes. 
B)  trade or business expenses. 
C)  charitable contributions made. 
D)  rent and royalty expenses. 
A)  state and local income taxes. 
B)  trade or business expenses. 
C)  charitable contributions made. 
D)  rent and royalty expenses.

Question 2

What is the treatment of charitable contributions in excess of the applicable limits for the current year?

Accepted Answer

The charitable contribution in excess of

Question 3

CT Computer Corporation, a cash- basis taxpayer, sells service contracts on the computers it sells. At the beginni January of this year, CT Corporation sold contracts with service to begin immediately:   The amount of income CT Corporation must report for this year is

Accepted Answer

A)  $1,680. 
B)  $5,000. 
C)  $200. 
D)  $1,000. 
A)  $1,680. 
B)  $5,000. 
C)  $200. 
D)  $1,000.

Question 4

Hildi and Frank have decided to form an interior design partnership. Since Hildi will spend twice as much time as Frank in the business, Hildi would like the partnership agreement to provide for a fixed minimum monthly income. Hildi and Frank expect the partnership to show a loss in the first year of operations. Discuss the issues raised by this arrangement and the likely tax treatment of these issues.

Accepted Answer

The required minimum payments to Hildi a

Question 5

Charlene can invest $4,000 of after- tax dollars (AT$) directly in a taxable bond outside an IRA, or she can contribute the $4,000 to a nondeductible IRA and invest in the same bond through the IRA vehicle. In either case, the bond yields an annual 7% before- tax rate of return (BTROR). Charlene's marginal tax rate is 20%, and she expects it to remain so for the entire investment horizon of 25 years. What is her annualized after- tax rate of return (annualized ATROR) for the "bond outside the IRA"?

Accepted Answer

A)  6.5% 
B)  7% 
C)  5.6% 
D)  6% 
A)  6.5% 
B)  7% 
C)  5.6% 
D)  6%

Question 6

All states impose a state income tax which is generally based on an individual's federal adjusted gross income (AGI) with minor adjustments.

Accepted Answer

A) True 
 B)False

Question 7

DAD Partnership has one corporate partner, Domino Corporation, with a fiscal year- end of June 30. Domino has a 30% interest in DAD. The other partners are individuals with a calendar year for tax purposes, none of whom has a 5% or more interest in DAD Partnership. What are DAD Partnership's choices with respect to selecting a tax year?

Accepted Answer

DAD must use a calendar year f

Question 8

Discuss tax- planning options available for expenses incurred for child and dependent care.

Accepted Answer

Certain employers may offer up to $5,000

Question 9

John supports Kevin, his cousin, who lived with him throughout 2018. John also supports three other individual not live with him: Donna, who is John's mother Melissa, who John's stepsister Morris, who is Kevin's brother
Assume that Donna, Melissa, Morris, and Kevin each earn less than $4,150. How many dependents can John clai

Accepted Answer

A)  1 
B)  2 
C)  3 
D)  4 
A)  1 
B)  2 
C)  3 
D)  4

Question 10

Blaine Greer lives alone. His support comes from the following sources:   Assuming a multiple support declaration exists, which of the individuals may claim Blaine as a dependent?

Accepted Answer

A)  Ken or Martha 
B)  Ken, Martha, or Natalie 
C)  Buddy, Ken, or Martha 
D)  None of them. 
A)  Ken or Martha 
B)  Ken, Martha, or Natalie 
C)  Buddy, Ken, or Martha 
D)  None of them.

Question 11

Jonathon, age 50 and in good health, withdrew $6,000 from his pension plan during the current year. The withdrawal was not eligible for any exception to the 10% penalty. Jonathon had made $40,000 of after- tax contributions to the plan while his employer had contributed $80,000. In addition to relevant income taxes, how much penalty must Jonathon pay?

Accepted Answer

A)  $200 
B)  $0 
C)  $600 
D)  $400 
A)  $200 
B)  $0 
C)  $600 
D)  $400

Question 12

Justin has AGI of $110,000 before considering his $30,000 loss from rental property, which he actively manages. How much of the rental loss can Justin deduct this year?

Accepted Answer

A)  $20,000 
B)  $25,000 
C)  $10,000 
D)  $30,000 
A)  $20,000 
B)  $25,000 
C)  $10,000 
D)  $30,000

Question 13

Melanie, a U.S. citizen living in Paris, France, for the last three years, earns a salary of $125,000 in 2018. Melanie's housing costs are $24,000 per year, which is reasonable. How much can Melanie exclude from income?

Accepted Answer

A)  $149,000 
B)  $120,524 
C)  $128,100 
D)  $111,276 
A)  $149,000 
B)  $120,524 
C)  $128,100 
D)  $111,276

Question 14

S corporation shareholders who own more than 2% of the outstanding stock are eligible for which of the following tax- free benefits?

Accepted Answer

A)  exclusion for cafeteria plan benefits 
B)  exclusion from income for premiums paid for accident and health and medical reimbursement plans 
C)  group term life insurance exclusion under Sec. 79 for premiums paid for up to $50,000 coverage 
D)  None of the above. 
A)  exclusion for cafeteria plan benefits 
B)  exclusion from income for premiums paid for accident and health and medical reimbursement plans 
C)  group term life insurance exclusion under Sec. 79 for premiums paid for up to $50,000 coverage 
D)  None of the above.

Question 15

Bergeron is a local manufacturer of off- shore drilling platforms. This year, Bergeron entered into a contract to construct a drilling platform, which will be placed in the North Atlantic Ocean. The total contract price is $5,000,000, and Bergeron estimates the total construction cost at $2,000,000. Actual costs incurred this year are
$600,000. If Bergeron uses the completed contract method, the gross profit for this year is

Accepted Answer

A)  $400,000. 
B)  $2,000,000. 
C)  $0. 
D)  $600,000. 
A)  $400,000. 
B)  $2,000,000. 
C)  $0. 
D)  $600,000.

Question 16

In a Sec. 351 transfer, the corporation takes the shareholder's adjusted basis in the contributed property, regardless of whether the property's FMV is greater than or less than its adjusted basis at the date of contribution.

Accepted Answer

A) True 
 B)False

Question 17

Frank, a single person, sold his home this year. He had owned and lived in the house for 10 years. Frank signed contract on March 4 to sell his home and closed the sale on May 3.   Based on these facts, what is the amount of his recognized gain?

Accepted Answer

A)  $52,000 
B)  $39,800 
C)  $40,000 
D)  $0 
A)  $52,000 
B)  $39,800 
C)  $40,000 
D)  $0

Question 18

An individual with AGI equal to or less than $150,000 in the prior year may generally avoid penalties for underpayment of estimated tax in each of the following cases with the exception of

Accepted Answer

A)  100% of the actual tax liability for the prior year is paid. 
B)  90% of the tax due for the current year is paid when computed on an annualized basis. 
C)  estimated tax is less than $1,500. 
D)  90% of the tax due for the current year is paid. 
A)  100% of the actual tax liability for the prior year is paid. 
B)  90% of the tax due for the current year is paid when computed on an annualized basis. 
C)  estimated tax is less than $1,500. 
D)  90% of the tax due for the current year is paid.

Question 19

Hawaii, Inc., began a child care facility for its employees during the year. The corporation incurred the following expenses:

Accepted Answer

The credit is ($138,000 × .25)

Question 20

Explain how tax planning may allow a deduction of qualified medical expenses.

Accepted Answer

Medical expenses may be pushed into one

All of the following items are deductions for adjusted gross income except

What is the treatment of charitable contributions in excess of the applicable limits for the current year?

CT Computer Corporation, a cash- basis taxpayer, sells service contracts on the computers it sells. At the beginni January of this year, CT Corporation sold contracts with service to begin immediately: The amount of income CT Corporation must report for this year is

All states impose a state income tax which is generally based on an individual's federal adjusted gross income (AGI) with minor adjustments.

Discuss tax- planning options available for expenses incurred for child and dependent care.

Blaine Greer lives alone. His support comes from the following sources: Assuming a multiple support declaration exists, which of the individuals may claim Blaine as a dependent?

Justin has AGI of $110,000 before considering his $30,000 loss from rental property, which he actively manages. How much of the rental loss can Justin deduct this year?

Melanie, a U.S. citizen living in Paris, France, for the last three years, earns a salary of $125,000 in 2018. Melanie's housing costs are $24,000 per year, which is reasonable. How much can Melanie exclude from income?

S corporation shareholders who own more than 2% of the outstanding stock are eligible for which of the following tax- free benefits?

In a Sec. 351 transfer, the corporation takes the shareholder's adjusted basis in the contributed property, regardless of whether the property's FMV is greater than or less than its adjusted basis at the date of contribution.

Frank, a single person, sold his home this year. He had owned and lived in the house for 10 years. Frank signed contract on March 4 to sell his home and closed the sale on May 3. Based on these facts, what is the amount of his recognized gain?

An individual with AGI equal to or less than $150,000 in the prior year may generally avoid penalties for underpayment of estimated tax in each of the following cases with the exception of

Hawaii, Inc., began a child care facility for its employees during the year. The corporation incurred the following expenses:

Explain how tax planning may allow a deduction of qualified medical expenses.

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

All of the following items are deductions for adjusted gross income except

What is the treatment of charitable contributions in excess of the applicable limits for the current year?

CT Computer Corporation, a cash- basis taxpayer, sells service contracts on the computers it sells. At the beginni January of this year, CT Corporation sold contracts with service to begin immediately: The amount of income CT Corporation must report for this year is

All states impose a state income tax which is generally based on an individual's federal adjusted gross income (AGI) with minor adjustments.

Discuss tax- planning options available for expenses incurred for child and dependent care.

Blaine Greer lives alone. His support comes from the following sources: Assuming a multiple support declaration exists, which of the individuals may claim Blaine as a dependent?

Justin has AGI of $110,000 before considering his $30,000 loss from rental property, which he actively manages. How much of the rental loss can Justin deduct this year?

Melanie, a U.S. citizen living in Paris, France, for the last three years, earns a salary of $125,000 in 2018. Melanie's housing costs are $24,000 per year, which is reasonable. How much can Melanie exclude from income?

S corporation shareholders who own more than 2% of the outstanding stock are eligible for which of the following tax- free benefits?

In a Sec. 351 transfer, the corporation takes the shareholder's adjusted basis in the contributed property, regardless of whether the property's FMV is greater than or less than its adjusted basis at the date of contribution.

Frank, a single person, sold his home this year. He had owned and lived in the house for 10 years. Frank signed contract on March 4 to sell his home and closed the sale on May 3. Based on these facts, what is the amount of his recognized gain?

An individual with AGI equal to or less than $150,000 in the prior year may generally avoid penalties for underpayment of estimated tax in each of the following cases with the exception of

Hawaii, Inc., began a child care facility for its employees during the year. The corporation incurred the following expenses:

Explain how tax planning may allow a deduction of qualified medical expenses.

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