Question 1

Where, on the tax return, can a taxpayer claim a charitable deduction?

Accepted Answer

A) As a standard deduction 
B) As an itemized deduction 
C) As a credit 
D) As an adjustment to income 
A) As a standard deduction 
B) As an itemized deduction 
C) As a credit 
D) As an adjustment to income

Question 2

What trust has the personal exemption amount of $300?

Accepted Answer

A) Complex Trusts 
B) Simple Trusts 
C) Both A and B 
D) Neither A or B 
A) Complex Trusts 
B) Simple Trusts 
C) Both A and B 
D) Neither A or B

Question 3

What is the tax base to which you would apply a tax rate when figuring alternative minimum tax?

Accepted Answer

A) Regular taxable income 
B) Alternative minimum taxable income 
C) Alternative minimum adjustments 
D) Modified accelerated cost recovery system 
A) Regular taxable income 
B) Alternative minimum taxable income 
C) Alternative minimum adjustments 
D) Modified accelerated cost recovery system

Question 4

What is the difference of an asset that is sold below fair market value referred to as?

Accepted Answer

A) Wash Sales 
B) Bargain Element 
C) Depreciation Recapture 
D) Personal Property Rules 
A) Wash Sales 
B) Bargain Element 
C) Depreciation Recapture 
D) Personal Property Rules

Question 5

Divorce happens. Often there are children involved needing child support. Often there is property involved that needs "splitting." Sometimes alimony must be paid. Payments as alimony must meet a certain set of rules. What condition is a payment as alimony rule?

Accepted Answer

A) Payment must be made in cash. 
B) Payment must be simultaneous with child support (if applicable). 
C) Front loading should not be avoided. 
D) Payer and payee must file a joint tax return. 
A) Payment must be made in cash. 
B) Payment must be simultaneous with child support (if applicable). 
C) Front loading should not be avoided. 
D) Payer and payee must file a joint tax return.

Question 6

There is a distinction made between gifs that are used by a charity (use related) and gifs that are not used (use unrelated). What situation best describes an use unrelated gift received by a charity?

Accepted Answer

A) A gifted art piece on display at the local museum. 
B) A gifted car that is given to a charity's client. 
C) A gifted house that a charity occupies. 
D) None of the above. 
A) A gifted art piece on display at the local museum. 
B) A gifted car that is given to a charity's client. 
C) A gifted house that a charity occupies. 
D) None of the above.

Question 7

Which of the following is true regarding tax evasion?

Accepted Answer

A) The U.S. Supreme Court states that taxpayers should arrange transactions to pay the most tax possible 
B) Using legal means of reducing the taxpayer's tax liability is considered tax evasion 
C) Taxpayers who lie on their tax returns are rarely caught 
D) Taxpayers found guilty of tax evasion must pay the tax that would otherwise have been due 
A) The U.S. Supreme Court states that taxpayers should arrange transactions to pay the most tax possible 
B) Using legal means of reducing the taxpayer's tax liability is considered tax evasion 
C) Taxpayers who lie on their tax returns are rarely caught 
D) Taxpayers found guilty of tax evasion must pay the tax that would otherwise have been due

Question 8

What are assets placed in service between 1981 and 1986 for depreciation rules are often referred to?

Accepted Answer

A) Modified Accelerated Cost Recovery System 
B) Accelerated Cost Recovery System 
C) Accelerated Cost Basis 
D) There is no correlation between asset placement and dates of service. 
A) Modified Accelerated Cost Recovery System 
B) Accelerated Cost Recovery System 
C) Accelerated Cost Basis 
D) There is no correlation between asset placement and dates of service.

Question 9

In regards to tax planning, what is the financial planner's goal?

Accepted Answer

A) Maximize the client's tax due 
B) Minimize the client's tax due 
C) Maximize the client's after-tax wealth 
D) Maximize the client's income that can be hidden from the IRS 
A) Maximize the client's tax due 
B) Minimize the client's tax due 
C) Maximize the client's after-tax wealth 
D) Maximize the client's income that can be hidden from the IRS

Question 10

Your client's husband just died. She has an 8 year old daughter. How long may your client file jointly for federal taxes?

Accepted Answer

A) One year 
B) Two years 
C) Indefinitely 
D) Once the spouse has passed, the surviving spouse must file single or head of household. 
A) One year 
B) Two years 
C) Indefinitely 
D) Once the spouse has passed, the surviving spouse must file single or head of household.

Question 11

What trust has the personal exemption amount of $100?

Accepted Answer

A) Complex Trusts 
B) Simple Trusts 
C) Both A and B 
D) Neither A or B 
A) Complex Trusts 
B) Simple Trusts 
C) Both A and B 
D) Neither A or B

Question 12

What IRS form does an individual taxpayer use to figure any alternative minimum tax?

Accepted Answer

A) Form 1040 
B) Form 1040A 
C) Form 6251 
D) Form 8801 
A) Form 1040 
B) Form 1040A 
C) Form 6251 
D) Form 8801

Question 13

What determines whether an estate or trust's income is taxable to the estate or trust?

Accepted Answer

A) The amount held by the estate or trust at the end of the taxable year 
B) The amount distributed to beneficiaries during the taxable year 
C) The distributable net income 
D) The distributable gross income 
A) The amount held by the estate or trust at the end of the taxable year 
B) The amount distributed to beneficiaries during the taxable year 
C) The distributable net income 
D) The distributable gross income

Question 14

Which of the following is true regarding the alternative minimum tax?

Accepted Answer

A) The alternative minimum tax encourages taxpayers to take advantage of tax relief incentives 
B) The alternative minimum tax is an additional tax paid on certain preference items 
C) The alternative minimum tax is a parallel tax system that is used to ensure that taxpayers pay less tax, if able 
D) The alternative minimum tax is a parallel tax system used to ensure that taxpayers with certain preference items pay a minimum amount of tax 
A) The alternative minimum tax encourages taxpayers to take advantage of tax relief incentives 
B) The alternative minimum tax is an additional tax paid on certain preference items 
C) The alternative minimum tax is a parallel tax system that is used to ensure that taxpayers pay less tax, if able 
D) The alternative minimum tax is a parallel tax system used to ensure that taxpayers with certain preference items pay a minimum amount of tax

Question 15

Losses from a passive activity can only offset positive income from what type of activity?

Accepted Answer

A) Passive activity 
B) Active activity 
C) Portfolio income 
D) Any type of activity that was sold or otherwise disposed of 
A) Passive activity 
B) Active activity 
C) Portfolio income 
D) Any type of activity that was sold or otherwise disposed of

Question 16

What type of property is not excluded from the definition of like-kind exchanges?

Accepted Answer

A) Stocks, bonds, and notes. 
B) Inventory property used for business. 
C) City real estate for a ranch or farm. 
D) Foreign real estate. 
A) Stocks, bonds, and notes. 
B) Inventory property used for business. 
C) City real estate for a ranch or farm. 
D) Foreign real estate.

Question 17

What law(s) is based on custom, general principles, and is embodied in case law?

Accepted Answer

A) Alimony Laws 
B) Child Support Laws 
C) Common Law 
D) Divorce Laws 
A) Alimony Laws 
B) Child Support Laws 
C) Common Law 
D) Divorce Laws

Question 18

Your client informs you that he has not paid taxes for the last five years. You know this is a criminal fraud and inform your client that this crime is a ____?

Accepted Answer

A) Civil Fraud 
B) Misdemeanor 
C) Felony 
D) Penalty Negligence 
A) Civil Fraud 
B) Misdemeanor 
C) Felony 
D) Penalty Negligence

Question 19

Your clients are a young married couple that is not sure how to best file their income taxes. They think they should itemized deductions because they have rental real estate. How should this couple file?

Accepted Answer

A) Married Filing Separately 
B) Head of Household 
C) Married Filing Jointly 
D) Single 
A) Married Filing Separately 
B) Head of Household 
C) Married Filing Jointly 
D) Single

Question 20

Bart owns a brewery that specializes in a beer containing caffeine. He recently purchased a $20,000 coffee maker to help add a kick to his brew. He expects the coffee maker to have a useful life of ten years and have a salvage value of $2,000. If Bart's brewery, Bart's Brewskies, is using the double declining depreciation method, how much would he depreciate in the first year?

Accepted Answer

A) $5,000 
B) $1,000 
C) $2,500 
D) $4,000 
E) $3,500 
A) $5,000 
B) $1,000 
C) $2,500 
D) $4,000 
E) $3,500

Where, on the tax return, can a taxpayer claim a charitable deduction?

What trust has the personal exemption amount of $300?

What is the tax base to which you would apply a tax rate when figuring alternative minimum tax?

What is the difference of an asset that is sold below fair market value referred to as?

Divorce happens. Often there are children involved needing child support. Often there is property involved that needs "splitting." Sometimes alimony must be paid. Payments as alimony must meet a certain set of rules. What condition is a payment as alimony rule?

There is a distinction made between gifs that are used by a charity (use related) and gifs that are not used (use unrelated). What situation best describes an use unrelated gift received by a charity?

Which of the following is true regarding tax evasion?

What are assets placed in service between 1981 and 1986 for depreciation rules are often referred to?

In regards to tax planning, what is the financial planner's goal?

Your client's husband just died. She has an 8 year old daughter. How long may your client file jointly for federal taxes?

What trust has the personal exemption amount of $100?

What IRS form does an individual taxpayer use to figure any alternative minimum tax?

What determines whether an estate or trust's income is taxable to the estate or trust?

Which of the following is true regarding the alternative minimum tax?

Losses from a passive activity can only offset positive income from what type of activity?

What type of property is not excluded from the definition of like-kind exchanges?

What law(s) is based on custom, general principles, and is embodied in case law?

Your client informs you that he has not paid taxes for the last five years. You know this is a criminal fraud and inform your client that this crime is a ____?

Your clients are a young married couple that is not sure how to best file their income taxes. They think they should itemized deductions because they have rental real estate. How should this couple file?

Education Planning

Education Planning

Estate Planning

Estate Planning

General Principles of Financial Planning

General Principles of Financial Planning

Investment Planning

Investment Planning

Professional Conduct and Regulation

Professional Conduct and Regulation

Retirement Savings and Income Planning

Retirement Savings and Income Planning

Risk Management and Insurance Planning

Risk Management and Insurance Planning

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Exam 8: Tax Planning

Where, on the tax return, can a taxpayer claim a charitable deduction?

What trust has the personal exemption amount of $300?

What is the tax base to which you would apply a tax rate when figuring alternative minimum tax?

What is the difference of an asset that is sold below fair market value referred to as?

Divorce happens. Often there are children involved needing child support. Often there is property involved that needs "splitting." Sometimes alimony must be paid. Payments as alimony must meet a certain set of rules. What condition is a payment as alimony rule?

There is a distinction made between gifs that are used by a charity (use related) and gifs that are not used (use unrelated). What situation best describes an use unrelated gift received by a charity?

Which of the following is true regarding tax evasion?

What are assets placed in service between 1981 and 1986 for depreciation rules are often referred to?

In regards to tax planning, what is the financial planner's goal?

Your client's husband just died. She has an 8 year old daughter. How long may your client file jointly for federal taxes?

What trust has the personal exemption amount of $100?

What IRS form does an individual taxpayer use to figure any alternative minimum tax?

What determines whether an estate or trust's income is taxable to the estate or trust?

Which of the following is true regarding the alternative minimum tax?

Losses from a passive activity can only offset positive income from what type of activity?

What type of property is not excluded from the definition of like-kind exchanges?

What law(s) is based on custom, general principles, and is embodied in case law?

Your client informs you that he has not paid taxes for the last five years. You know this is a criminal fraud and inform your client that this crime is a ____?

Your clients are a young married couple that is not sure how to best file their income taxes. They think they should itemized deductions because they have rental real estate. How should this couple file?

Education Planning

Education Planning

Estate Planning

Estate Planning

General Principles of Financial Planning

General Principles of Financial Planning

Investment Planning

Investment Planning

Professional Conduct and Regulation

Professional Conduct and Regulation

Retirement Savings and Income Planning

Retirement Savings and Income Planning

Risk Management and Insurance Planning

Risk Management and Insurance Planning

Tax Planning

Filters