Exam 18: Enrolled-Agent

In 2000, Mark purchased 100 shares of Roman, Inc. for $10 per share. In 2004 Roman, Inc. completely liquidated and distributed $8,000 to Mark. Mark must report income from this distribution as:

Randy Lee is an ordained minister of a tax-exempt church. Randy receives a salary plus a housing allowance for rent and utilities. Which of the following statements is correct?

A partnership, S corporation or personal service corporation can elect to use a tax year other than its required tax year, if it:

The Becks own and operate an assisted-living facility. They provide maid service and meals in a common dining room. Where should they report the income and expenses from this activity?

Tom Brown, who is single, owns a rental apartment building property. This is the only rental property that Tom owns. He "actively participates" in this rental activity as he collects the rents and performs ordinary and necessary repairs. In 2004, Tom had a loss of $30,000 on this rental activity and had no reportable passive income. His adjusted gross income, without regard to this rental loss, is $60,000. How much of the rental loss may Tom deduct on his 2004 return?

The board of directors of Walden Corporation authorized a year end distribution to its three shareholders. Each distribution would be equal in value but the shareholder could choose to receive the distribution in cash or corporate stock. If a shareholder chose to receive corporate stock, the distribution should be treated as:

York, Inc. directly owns stock of Ajax Corporation. To determine if Ajax Corporation is a member of a controlled group with York, Inc. as the common parent, York, Inc. must own at least what percentage of the voting and total value of the Ajax Corporation stock?

The Lux Corporation incurred $10,000 in start-up costs when it opened for business in 2004. What is the minimum period over which these expenses can be recovered?

A corporate payer of an individual shareholder dividend does not have the taxpayer identification number for that shareholder. What backup withholding percentage rate must the corporate payer use for this shareholder's dividend payments?

The Office of Professional Responsibility can censure, suspend or disbar a practitioner from practice before the Internal Revenue Service for incompetence and/or disreputable conduct. Which one of the following is considered disreputable conduct?

Which of the following costs incurred on rental property should be classified as a capital improvement?

Esther works as a computer programmer for a marketing firm. She performs 40% of her computer programming on a home computer during the weekend (her company is closed on the weekends) so she can take off 2 days during the regular work week. The home computer that Esther works on is identical to the computer she uses at work, and she uses it exclusively for her job related duties. Esther's employer does not require Esther to take work home with her on the weekends-it is Esther's choice. Because she uses the home computer exclusively for business purposes, she can use the following percentage of business usage when computing her yearly depreciation for the computer:

In the process of preparing Orlo Corporation's 2002 return, Dave, an enrolled agent, provided to Orlo Corporation calculations he had prepared computing basis of property that was sold and reported on the 1120 Form 4797. Later, when Orlo Corporation's 2002 return was examined by the Internal Revenue Service, Orlo Corporation refuses to provide the Internal Revenue Service with the calculations, claiming that this was a privileged communication between Orlo Corporation and its federally authorized practitioner. Which of the following statements is true?

Special rules apply to like kind exchanges between related persons. Under these rules, related persons are:

There are five tests which must be met for you to claim an exemption for a dependent. Which of the following is not a requirement?

After the issuance of a Statutory Notice of Deficiency, failure to timely file a petition with Tax Court will result in which of the following?

With respect to unenrolled return preparers, which of the follow- ing statements is correct?

Disputes involving what areas of taxation may not be resolved in the United States Tax Court?

Margaret Smith is a CPA who is representing John & Mary Jones before the Wage and Investment Division of the Internal Revenue Service. The Service is questioning John & Mary on contributions that were listed on page 2 of their 2004 Form 1040. While reviewing the documentation provided by John & Mary, Margaret discovers contributions that were made to a non-qualified organization. What is the appropriate action for Margaret to take?

How long must each practitioner maintain records of their completed CPE credits?