Question 1

Members of a single family may be counted as one shareholder for S corporation purposes.

Accepted Answer

A) True 
 B)False

Question 2

In the Pension Model, the initial investment is deductible or excludible from gross income, and investment earnings are taxed currently.

Accepted Answer

A) True 
 B)False

Question 3

Will invests $20,000 of after- tax dollars (AT$) in tax- exempt municipal bonds which yield 5% per year. He reinvests the interest in the same bonds and holds the bonds for two years. Will's marginal tax rate is 25%. What is his after- tax accumulation at the end of two years?

Accepted Answer

A)  $22,050 
B)  $22,000 
C)  $21,528 
D)  $21,000 
A)  $22,050 
B)  $22,000 
C)  $21,528 
D)  $21,000

Question 4

Expenditures for a weight reduction program are deductible if recommended by a physician to treat a specific medical condition such as hypertension caused by excess weight.

Accepted Answer

A) True 
 B)False

Question 5

Hannah is a 52- year- old an unmarried taxpayer who is not an active participant in an employer- sponsored qualified retirement plan. Before IRA contributions, her AGI is $65,000 in 2018. What is the maximum amount she may contribute to a tax deductible IRA?

Accepted Answer

A)  $6,500 
B)  $4,400 
C)  $5,200 
D)  $5,500 
A)  $6,500 
B)  $4,400 
C)  $5,200 
D)  $5,500

Question 6

Sec. 179 tax benefits are recaptured if at any time an asset is converted to personal use.

Accepted Answer

A) True 
 B)False

Question 7

Chahana acquired and placed in service $1,165,000 of equipment on August 1, 2018 for use in her sole proprietorship. The equipment is 5- year recovery property. No other acquisitions are made during the year. Chahana elects to expense the maximum amount under Sec. 179, and bonus depreciation is not applied. Chahana's total deductions for 2018 (including Sec. 179 and depreciation) are

Accepted Answer

A)  $1,033,000. 
B)  $233,000. 
C)  $1,233,000. 
D)  $1,165,000. 
A)  $1,033,000. 
B)  $233,000. 
C)  $1,233,000. 
D)  $1,165,000.

Question 8

A taxpayer has made substantial donations of both cash and capital gain property public charities. Due to lower income this year, the taxpayer could exceed the charitable contribution ceilings. The taxpayer will apply the 60% AGI ceiling before applying the 30% AGI ceiling.

Accepted Answer

A) True 
 B)False

Question 9

Married couples will normally file jointly. Identify a situation where a married couple may prefer to file separately.

Accepted Answer

A)  A couple is separated and contemplating divorce. 
B)  One spouse can be held responsible for the entire tax liability. 
C)  The spouse with lower income has substantial medical expenses. 
D)  All of the above. 
A)  A couple is separated and contemplating divorce. 
B)  One spouse can be held responsible for the entire tax liability. 
C)  The spouse with lower income has substantial medical expenses. 
D)  All of the above.

Question 10

The primary citation for a federal circuit court of appeals case would be

Accepted Answer

A)  3 F.3d 134. 
B)  44 F.Supp. 403. 
C)  79- 2 USTC & 9693. 
D)  40 AFTR 2d 78- 1234. 
A)  3 F.3d 134. 
B)  44 F.Supp. 403. 
C)  79- 2 USTC & 9693. 
D)  40 AFTR 2d 78- 1234.

Question 11

In the Deferred Model, only after- tax dollars are invested.

Accepted Answer

A) True 
 B)False

Question 12

The Internal Revenue Service is the branch of the Treasury Department responsible for administering the federal tax law.

Accepted Answer

A) True 
 B)False

Question 13

When a donee disposes of appreciated gift property, the recapture amount for the donee is computed by including the recapture amount attributable to the donor.

Accepted Answer

A) True 
 B)False

Question 14

For federal income tax purposes, income is allocated between a husband and wife depending on the state of residence.

Accepted Answer

A) True 
 B)False

Question 15

In February 2018, Pietra acquired a new car costing $82,000. She used the car 80% in her sole proprietorship. Assuming Sec. 179 is not elected, Pietra's maximum depreciation deduction allowable for the car will be

Accepted Answer

A)  $65,600. 
B)  $14,400. 
C)  $13,120. 
D)  $8,000. 
A)  $65,600. 
B)  $14,400. 
C)  $13,120. 
D)  $8,000.

Question 16

Nonrefundable credits may offset tax liability but may not result in additional payments to the taxpayer.

Accepted Answer

A) True 
 B)False

Question 17

Advance approval and the filing of Form 970 is required whenever a taxpayer adopts LIFO.

Accepted Answer

A) True 
 B)False

Question 18

The corporate tax rate is

Accepted Answer

A)  progressive. 
B)  proportional. 
C)  regressive. 
D)  none of the above. 
A)  progressive. 
B)  proportional. 
C)  regressive. 
D)  none of the above.

Question 19

A passive activity includes any rental activity or any trade or business in which the taxpayer does not materially participate.

Accepted Answer

A) True 
 B)False

Question 20

Bob, an employee of Modern Corp., receives a fringe benefit (in lieu of a salary increase) of $1,000. Bob is in a 32% tax bracket. The fringe benefit is nontaxable to Bob. If he had instead paid for the benefit out of his own money, the cost would not be deductible. Bob's after- tax savings from receiving the tax- free benefit is

Accepted Answer

A)  $680. 
B)  $1,000. 
C)  $0. 
D)  $320. 
A)  $680. 
B)  $1,000. 
C)  $0. 
D)  $320.

Members of a single family may be counted as one shareholder for S corporation purposes.

In the Pension Model, the initial investment is deductible or excludible from gross income, and investment earnings are taxed currently.

Will invests $20,000 of after- tax dollars (AT$) in tax- exempt municipal bonds which yield 5% per year. He reinvests the interest in the same bonds and holds the bonds for two years. Will's marginal tax rate is 25%. What is his after- tax accumulation at the end of two years?

Expenditures for a weight reduction program are deductible if recommended by a physician to treat a specific medical condition such as hypertension caused by excess weight.

Hannah is a 52- year- old an unmarried taxpayer who is not an active participant in an employer- sponsored qualified retirement plan. Before IRA contributions, her AGI is $65,000 in 2018. What is the maximum amount she may contribute to a tax deductible IRA?

Sec. 179 tax benefits are recaptured if at any time an asset is converted to personal use.

A taxpayer has made substantial donations of both cash and capital gain property public charities. Due to lower income this year, the taxpayer could exceed the charitable contribution ceilings. The taxpayer will apply the 60% AGI ceiling before applying the 30% AGI ceiling.

Married couples will normally file jointly. Identify a situation where a married couple may prefer to file separately.

The primary citation for a federal circuit court of appeals case would be

In the Deferred Model, only after- tax dollars are invested.

The Internal Revenue Service is the branch of the Treasury Department responsible for administering the federal tax law.

When a donee disposes of appreciated gift property, the recapture amount for the donee is computed by including the recapture amount attributable to the donor.

For federal income tax purposes, income is allocated between a husband and wife depending on the state of residence.

In February 2018, Pietra acquired a new car costing $82,000. She used the car 80% in her sole proprietorship. Assuming Sec. 179 is not elected, Pietra's maximum depreciation deduction allowable for the car will be

Nonrefundable credits may offset tax liability but may not result in additional payments to the taxpayer.

Advance approval and the filing of Form 970 is required whenever a taxpayer adopts LIFO.

The corporate tax rate is

A passive activity includes any rental activity or any trade or business in which the taxpayer does not materially participate.

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

Members of a single family may be counted as one shareholder for S corporation purposes.

In the Pension Model, the initial investment is deductible or excludible from gross income, and investment earnings are taxed currently.

Will invests $20,000 of after- tax dollars (AT$) in tax- exempt municipal bonds which yield 5% per year. He reinvests the interest in the same bonds and holds the bonds for two years. Will's marginal tax rate is 25%. What is his after- tax accumulation at the end of two years?

Expenditures for a weight reduction program are deductible if recommended by a physician to treat a specific medical condition such as hypertension caused by excess weight.

Hannah is a 52- year- old an unmarried taxpayer who is not an active participant in an employer- sponsored qualified retirement plan. Before IRA contributions, her AGI is $65,000 in 2018. What is the maximum amount she may contribute to a tax deductible IRA?

Sec. 179 tax benefits are recaptured if at any time an asset is converted to personal use.

A taxpayer has made substantial donations of both cash and capital gain property public charities. Due to lower income this year, the taxpayer could exceed the charitable contribution ceilings. The taxpayer will apply the 60% AGI ceiling before applying the 30% AGI ceiling.

Married couples will normally file jointly. Identify a situation where a married couple may prefer to file separately.

The primary citation for a federal circuit court of appeals case would be

In the Deferred Model, only after- tax dollars are invested.

The Internal Revenue Service is the branch of the Treasury Department responsible for administering the federal tax law.

When a donee disposes of appreciated gift property, the recapture amount for the donee is computed by including the recapture amount attributable to the donor.

For federal income tax purposes, income is allocated between a husband and wife depending on the state of residence.

In February 2018, Pietra acquired a new car costing $82,000. She used the car 80% in her sole proprietorship. Assuming Sec. 179 is not elected, Pietra's maximum depreciation deduction allowable for the car will be

Nonrefundable credits may offset tax liability but may not result in additional payments to the taxpayer.

Advance approval and the filing of Form 970 is required whenever a taxpayer adopts LIFO.

The corporate tax rate is

A passive activity includes any rental activity or any trade or business in which the taxpayer does not materially participate.

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