Exam 18: Enrolled-Agent

Lisa was married with two dependent children in 2004. Her husband died in April and she did not remarry before the end of 2004. Which filing status should Lisa use for her tax return in 2004?

Which of the following statements is true regarding the filing of a Form 4868, Application for an Automatic Extension of Time to File, your 2004 tax return?

Bethany timely filed her 2001 1040 tax return and paid the $2,000 tax as shown on the return at the time of filing. The return was subsequently examined and Bethany signed an agreement form for the proposed changes on August 20, 2003. She paid the additional tax due of $5,000 on September 30, 2003. In 2004, Tiffany located missing records which she believes would make $3,000 of the additional assessment erroneous. Which of the following statements accurately states the date by which Bethany must file a claim for refund to get the $3,000 back?

Which of the following does not qualify as a nontaxable exchange or transfer?

ABC Corporation is dissolved on July 9, 2004. What is the due date, without extensions, for the filing of the final corporate income tax return?

Which statement pertaining to estimated tax payments is not correct?

Which of the following transactions qualifies as a likekind exchange?

Matt has a certified statement from his optometrist on December 1, 2004, that confirms he can see no better than 20/250. For tax year 2004, which is correct?

Eric, a cash basis taxpayer, owned 25% of Watson, Inc. stock. Watson, Inc. files a calendar year U.S. Corporate Income Tax Return Form 1120 employing the accrual method of accounting. Eric loaned Watson, Inc. $100,000 at the beginning of 2003. The accrued interest on this loan was $5,000 as of December 31, 2003. Watson,Inc.paid Eric the $5,000 in January of 2004. How should Eric report the interest income and Watson, Inc. report the interest expense from this transaction?

Bob Moon forms Moon Enterprises LLC (Limited Liability Company) during the year. What form must Moon Enterprises LLC file in order to elect to be taxed as a C corporation?

Corporations generally must make estimated tax payments if they expect their estimated tax (income tax less credits) to be equal to or more than:

Josephine Jones, an Enrolled Agent, received a complaint from the Office of Professional Responsibility. Select the statement below that is correct with respect to the contents of the answer that Josephine will file in rebuttal to the complaint.

A fiduciary representing a dissolving corporation may file a request for prompt assessment of tax. Generally, this request reduces the time allowed for assessment to:

Mrs) Domino made deductible contributions to traditional individual retirement accounts for several years. Mrs. Domino decides to withdraw $10,000 from one of her accounts in 2004. Mrs. Domino is 61years old. How does this transaction affect Mrs. Domino's 2004 tax return for 2004?

To maintain active enrollment to practice before the Internal Revenue Service, each individual enrolled is required to have his or her enrollment renewed. The Office of Professional Responsibility will notify the individual of his or her renewal of enrollment and will issue the individual a card to evidence enrollment. Which of the following statements about renewal of enrollment is correct?

Croaker, Inc. is a taxable domestic corporation. Dana Corporation, a large manufacturing corporation, owns 15% of Croaker, Inc.'s outstanding stock. In 2004, Dana Corporation received $100,000 in dividends from Croaker, Inc. Dana Corporation received no other dividends in 2004. Dana Corporation may deduct, within certain limits, what percentage of the dividends received?

Which of the following fringe benefits for meals is subject to the 50% deduction limit?

Which of the following items are generally included in inventory?

Mark is an accrual basis taxpayer. He shipped $500 worth of merchandise to Ralph on December 30, 2004. Mark sent Ralph an invoice January 2, 2005 that was payable in 30 days. Ralph mailed his check to Mark on February 2, 2005. Mark deposited the check on February 6, 2005. Mark received and reconciled his bank statement March 3, 2005. When does Mark record the $500 in income?

Supplemental wages are compensation paid in addition to an employee's regular wages. They do not include payments for: