Question 1

What IRS publication can you use to find a complete list of qualifying charitable organizations?

Accepted Answer

A) IRS Publication 17 
B) IRS Publication 78 
C) IRS Publication 942 
D) IRS Publication 1040 
A) IRS Publication 17 
B) IRS Publication 78 
C) IRS Publication 942 
D) IRS Publication 1040 B

Question 2

Which item below is not a test to file for Head of Household (HOH)?

Accepted Answer

A) The taxpayer is not married at end of year. 
B) The taxpayer pays more than half the cost of the home. 
C) The taxpayer is married living separately. 
D) The taxpayer's home was the main home for more than half the year of stepchildren. 
A) The taxpayer is not married at end of year. 
B) The taxpayer pays more than half the cost of the home. 
C) The taxpayer is married living separately. 
D) The taxpayer's home was the main home for more than half the year of stepchildren. C

Question 3

Which of the following can be an effective tax planning opportunity for individuals who may be subject to the alternative minimum tax?

Accepted Answer

A) Always deduct state income tax instead of state sales tax 
B) Increase investments in private activity tax-exempt bonds 
C) Accelerate income through IRA or pension distributions 
D) Pay off all home equity loans 
A) Always deduct state income tax instead of state sales tax 
B) Increase investments in private activity tax-exempt bonds 
C) Accelerate income through IRA or pension distributions 
D) Pay off all home equity loans C

Question 4

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 5

What is the maximum amount of charitable contributions a taxpayer can claim in any one year?

Accepted Answer

A) $5,000 
B) 25% of AGI 
C) 50% of AGI 
D) 100% of AGI 
A) $5,000 
B) 25% of AGI 
C) 50% of AGI 
D) 100% of AGI

Question 6

When were the passive activity and at-risk rules enacted?

Accepted Answer

A) 1950 
B) 1969 
C) 1986 
D) 1996 
A) 1950 
B) 1969 
C) 1986 
D) 1996

Question 7

Your client has contributed $45,000 to the Red Cross which exceeds her AGI limit. How many years can she carryover the excess?

Accepted Answer

A) 1 year 
B) 5 years 
C) Until all excess is deducted 
D) Cannot carryover excess deductions 
A) 1 year 
B) 5 years 
C) Until all excess is deducted 
D) Cannot carryover excess deductions

Question 8

There are several tax consequences of gain or loss on sale of assets; capital assets for businesses are any assets held for long-term investment. What category would not be considered a capital asset?

Accepted Answer

A) Business Inventories 
B) Commodities Derivatives 
C) Hedging Transaction Properties 
D) None of the above is capital assets. 
A) Business Inventories 
B) Commodities Derivatives 
C) Hedging Transaction Properties 
D) None of the above is capital assets.

Question 9

Rachel learned that her grandmother died and left her an inheritance in 2013. At that time, she decided that she would contribute at least a portion of that inheritance to charity. In 2014, she received the full amount of the inheritance. On December 15, 2015, she made a pledge and wrote a check to the charity. She mailed the check on January 2, 2016, and the charity received the check within a few days. In which year can Rachel deduct the contribution?

Accepted Answer

A) 2013 
B) 2014 
C) 2015 
D) 2016 
A) 2013 
B) 2014 
C) 2015 
D) 2016

Question 10

Where do laws concerning taxes begin?

Accepted Answer

A) White House 
B) Internal Revenue Service 
C) Senate Finance Committee 
D) House Ways and Means Committee 
A) White House 
B) Internal Revenue Service 
C) Senate Finance Committee 
D) House Ways and Means Committee

Question 11

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 12

What is the purpose of passive activity and at-risk rules?

Accepted Answer

A) To prevent businesses from incurring losses 
B) To prevent taxpayers from investing in high-risk businesses 
C) To prevent taxpayers from purposely losing money through a business in order to pay less tax on other income 
D) To keep the economy from growing too quickly 
A) To prevent businesses from incurring losses 
B) To prevent taxpayers from investing in high-risk businesses 
C) To prevent taxpayers from purposely losing money through a business in order to pay less tax on other income 
D) To keep the economy from growing too quickly

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

Your client has an apartment building in Denver and wants to "purchase" a condo in Detroit that he intends to rent out so he fills out Form 8824. Instead of renting out the property in Detroit, he lives in it. What concept is your client attempting to accomplish?

Accepted Answer

A) Qualifying Transaction 
B) Like-Kind Exchange 
C) Special Tax Switches 
D) Nothing, Form 8824 does not exist. 
A) Qualifying Transaction 
B) Like-Kind Exchange 
C) Special Tax Switches 
D) Nothing, Form 8824 does not exist.

Question 15

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 16

Buying shares back after selling them at a loss can negate tax deduction. To maintain the ability to deduct the loss, how long must one wait to repurchase those shares back?

Accepted Answer

A) 26 days 
B) 31 days 
C) 46 days 
D) 91 days 
A) 26 days 
B) 31 days 
C) 46 days 
D) 91 days

Question 17

What is the most common method taxpayers use to report income?

Accepted Answer

A) Cash 
B) Accrual 
C) Hybrid 
D) Accelerated 
A) Cash 
B) Accrual 
C) Hybrid 
D) Accelerated

Question 18

Which of the following is a non-taxable type of income?

Accepted Answer

A) Capital gain on the sale of a primary residence 
B) Capital gain on stocks 
C) Traditional IRA distributions 
D) Self-employment income 
A) Capital gain on the sale of a primary residence 
B) Capital gain on stocks 
C) Traditional IRA distributions 
D) Self-employment income

Question 19

The Revenue Act of 1916 views estates and trusts as what?

Accepted Answer

A) A way to avoid tax liability 
B) A way to transfer wealth between individuals 
C) A way to create additional tax liability 
D) A way to donate to charitable causes 
A) A way to avoid tax liability 
B) A way to transfer wealth between individuals 
C) A way to create additional tax liability 
D) A way to donate to charitable causes

Question 20

Which of the following is the term used for items that do not reverse over time?

Accepted Answer

A) Modification 
B) Adjustments 
C) Preferences 
D) Credits 
A) Modification 
B) Adjustments 
C) Preferences 
D) Credits

What IRS publication can you use to find a complete list of qualifying charitable organizations?

Which item below is not a test to file for Head of Household (HOH)?

Which of the following can be an effective tax planning opportunity for individuals who may be subject to the alternative minimum tax?

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

What is the maximum amount of charitable contributions a taxpayer can claim in any one year?

When were the passive activity and at-risk rules enacted?

Your client has contributed $45,000 to the Red Cross which exceeds her AGI limit. How many years can she carryover the excess?

There are several tax consequences of gain or loss on sale of assets; capital assets for businesses are any assets held for long-term investment. What category would not be considered a capital asset?

Where do laws concerning taxes begin?

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

What is the purpose of passive activity and at-risk rules?

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

Your client has an apartment building in Denver and wants to "purchase" a condo in Detroit that he intends to rent out so he fills out Form 8824. Instead of renting out the property in Detroit, he lives in it. What concept is your client attempting to accomplish?

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 ____?

Buying shares back after selling them at a loss can negate tax deduction. To maintain the ability to deduct the loss, how long must one wait to repurchase those shares back?

What is the most common method taxpayers use to report income?

Which of the following is a non-taxable type of income?

The Revenue Act of 1916 views estates and trusts as what?

Which of the following is the term used for items that do not reverse over time?

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

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Exam 8: Tax Planning

What IRS publication can you use to find a complete list of qualifying charitable organizations?

Which item below is not a test to file for Head of Household (HOH)?

Which of the following can be an effective tax planning opportunity for individuals who may be subject to the alternative minimum tax?

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

What is the maximum amount of charitable contributions a taxpayer can claim in any one year?

When were the passive activity and at-risk rules enacted?

Your client has contributed $45,000 to the Red Cross which exceeds her AGI limit. How many years can she carryover the excess?

There are several tax consequences of gain or loss on sale of assets; capital assets for businesses are any assets held for long-term investment. What category would not be considered a capital asset?

Where do laws concerning taxes begin?

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

What is the purpose of passive activity and at-risk rules?

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

Your client has an apartment building in Denver and wants to "purchase" a condo in Detroit that he intends to rent out so he fills out Form 8824. Instead of renting out the property in Detroit, he lives in it. What concept is your client attempting to accomplish?

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 ____?

Buying shares back after selling them at a loss can negate tax deduction. To maintain the ability to deduct the loss, how long must one wait to repurchase those shares back?

What is the most common method taxpayers use to report income?

Which of the following is a non-taxable type of income?

The Revenue Act of 1916 views estates and trusts as what?

Which of the following is the term used for items that do not reverse over time?

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