Question 1

Cash contributions to qualified organizations,such as churches,schools,and other qualifying charities,require a receipt for a contribution of $250 or more.

Accepted Answer

A) True 
 B)False

Question 2

Interest penalties for early withdrawal of savings from certificates of deposit are

Accepted Answer

A) not subtractable. 
B) subtractable as an adjustment to gross income. 
C) subtractable as an itemized deduction. 
D) subtractable as a credit. 
A) not subtractable. 
B) subtractable as an adjustment to gross income. 
C) subtractable as an itemized deduction. 
D) subtractable as a credit.

Question 3

A taxpayer who reported lottery winnings of $500 on his or her taxes could deduct a maximum of $500 in any offsetting gambling losses.

Accepted Answer

A) True 
 B)False

Question 4

For a mortgage interest tax credit,the home must not cost more than 90 to 110 percent of the average area purchase price.

Accepted Answer

A) True 
 B)False

Question 5

Flexible spending accounts are subject to a use-it-or-lose-it rule.

Accepted Answer

A) True 
 B)False

Question 6

The rule for tax-related records is,"When in doubt,throw it out."

Accepted Answer

A) True 
 B)False

Question 7

A taxpayer whose itemized deductions were less than his or her standard deduction would benefit by itemizing deductions.

Accepted Answer

A) True 
 B)False

Question 8

Vicki Chadwell made a $1,000 capital gain on an investment she owned for 15 months.Assuming Vicki is in the 35 percent marginal tax bracket,how much federal income tax would she pay on this capital gain?

Accepted Answer

A) $1,000 
B) $350 
C) $280 
D) $150 
A) $1,000 
B) $350 
C) $280 
D) $150

Question 9

The income of children over 18 years of age (or 24 if a full time student) is taxed at the parents' marginal tax rate.

Accepted Answer

A) True 
 B)False

Question 10

A person who is claimed as a dependent on someone else's tax return can claim ____ exemption(s) and at least a ____ standard deduction on his or her own tax return.

Accepted Answer

A) 1; $6,200 
B) 0; $6,200 
C) 0; $0 
D) 1; $0 
A) 1; $6,200 
B) 0; $6,200 
C) 0; $0 
D) 1; $0

Question 11

Irma and Dave Cedeno have a potential $2,000 capital gain on stock they have owned 11 months.They are in the 28 percent marginal tax bracket.How much longer would they have to hold this stock to reduce the tax liability on this gain?

Accepted Answer

A) 13 months and 1 day 
B) 12 months and 1 day 
C) 4 months and 1 day 
D) 1 month and 1 day 
A) 13 months and 1 day 
B) 12 months and 1 day 
C) 4 months and 1 day 
D) 1 month and 1 day

Question 12

Household income is modified gross income increased by any excluded foreign income and tax-exempt interest.

Accepted Answer

A) True 
 B)False

Question 13

A progressive tax is one that demands a higher percentage of a person's income as income increases.

Accepted Answer

A) True 
 B)False

Question 14

Earned income is reported to the recipient on a

Accepted Answer

A) W-4 form. 
B) Form 1099. 
C) W-2 form. 
D) Form 1040. 
A) W-4 form. 
B) Form 1099. 
C) W-2 form. 
D) Form 1040.

Question 15

The yield on a tax-exempt municipal bond earning 5.0 percent is equivalent to ____ percent on a taxable corporate bond for a taxpayer in the 35 percent marginal tax bracket.

Accepted Answer

A) 14.29 
B) 3.25 
C) 6.94 
D) 7.7 
A) 14.29 
B) 3.25 
C) 6.94 
D) 7.7

Question 16

When you file your federal income tax you may take a subtraction from your taxable income called an exemption for each person legally defined as your

Accepted Answer

A) child. 
B) parent. 
C) tenant. 
D) dependent. 
A) child. 
B) parent. 
C) tenant. 
D) dependent.

Question 17

A regressive tax is one that demands a higher percentage of a person's income as income increases.

Accepted Answer

A) True 
 B)False

Question 18

Which of the following is not defined as part of gross income?

Accepted Answer

A) Gifts and inheritances 
B) Capital gains 
C) Scholarship income spent on room and board 
D) Illegal income 
A) Gifts and inheritances 
B) Capital gains 
C) Scholarship income spent on room and board 
D) Illegal income

Question 19

Homeowners with appreciated principal residences can avoid tax on gains of up to $500,000 if married and filing jointly and up to $250,000 if single.The home must have been owned and used as the taxpayer's private residence for two out of the last five years prior to the date of sale.

Accepted Answer

A) True 
 B)False

Question 20

Which of the following types of income is (are) excludable from federal income taxation?

Accepted Answer

A) Income from a car pool 
B) Compensatory damages in physical injury cases 
C) Life insurance benefits received 
D) All of these 
A) Income from a car pool 
B) Compensatory damages in physical injury cases 
C) Life insurance benefits received 
D) All of these

Cash contributions to qualified organizations,such as churches,schools,and other qualifying charities,require a receipt for a contribution of $250 or more.

Interest penalties for early withdrawal of savings from certificates of deposit are

A taxpayer who reported lottery winnings of $500 on his or her taxes could deduct a maximum of $500 in any offsetting gambling losses.

For a mortgage interest tax credit,the home must not cost more than 90 to 110 percent of the average area purchase price.

Flexible spending accounts are subject to a use-it-or-lose-it rule.

The rule for tax-related records is,"When in doubt,throw it out."

A taxpayer whose itemized deductions were less than his or her standard deduction would benefit by itemizing deductions.

Vicki Chadwell made a $1,000 capital gain on an investment she owned for 15 months.Assuming Vicki is in the 35 percent marginal tax bracket,how much federal income tax would she pay on this capital gain?

The income of children over 18 years of age (or 24 if a full time student) is taxed at the parents' marginal tax rate.

A person who is claimed as a dependent on someone else's tax return can claim exemption(s) and at least a standard deduction on his or her own tax return.

Irma and Dave Cedeno have a potential $2,000 capital gain on stock they have owned 11 months.They are in the 28 percent marginal tax bracket.How much longer would they have to hold this stock to reduce the tax liability on this gain?

Household income is modified gross income increased by any excluded foreign income and tax-exempt interest.

A progressive tax is one that demands a higher percentage of a person's income as income increases.

Earned income is reported to the recipient on a

The yield on a tax-exempt municipal bond earning 5.0 percent is equivalent to ____ percent on a taxable corporate bond for a taxpayer in the 35 percent marginal tax bracket.

When you file your federal income tax you may take a subtraction from your taxable income called an exemption for each person legally defined as your

A regressive tax is one that demands a higher percentage of a person's income as income increases.

Which of the following is not defined as part of gross income?

Homeowners with appreciated principal residences can avoid tax on gains of up to $500,000 if married and filing jointly and up to $250,000 if single.The home must have been owned and used as the taxpayer's private residence for two out of the last five years prior to the date of sale.

Which of the following types of income is (are) excludable from federal income taxation?

Understanding Personal Finance

Career Planning

Financial Statements,tools,and Budgets

Managing Checking and Savings Accounts

Building and Maintaining Good Credit

Credit Cards and Consumer Loans

Vehicles and Other Major Purchases

Obtaining Affordable Housing

Managing Property and Liability Risk

Managing Health Expenses

Life Insurance Planning

Investment Fundamentals

Investing in Stocks and Bonds

Mutual Funds and Exchange Traded Funds

Real Estate and High-Risk Investments

Retirement and Estate Planning

Filters

Exam 4: Managing Income Taxes

Cash contributions to qualified organizations,such as churches,schools,and other qualifying charities,require a receipt for a contribution of $250 or more.

Interest penalties for early withdrawal of savings from certificates of deposit are

A taxpayer who reported lottery winnings of $500 on his or her taxes could deduct a maximum of $500 in any offsetting gambling losses.

For a mortgage interest tax credit,the home must not cost more than 90 to 110 percent of the average area purchase price.

Flexible spending accounts are subject to a use-it-or-lose-it rule.

The rule for tax-related records is,"When in doubt,throw it out."

A taxpayer whose itemized deductions were less than his or her standard deduction would benefit by itemizing deductions.

Vicki Chadwell made a $1,000 capital gain on an investment she owned for 15 months.Assuming Vicki is in the 35 percent marginal tax bracket,how much federal income tax would she pay on this capital gain?

The income of children over 18 years of age (or 24 if a full time student) is taxed at the parents' marginal tax rate.

A person who is claimed as a dependent on someone else's tax return can claim ____ exemption(s) and at least a ____ standard deduction on his or her own tax return.

Irma and Dave Cedeno have a potential $2,000 capital gain on stock they have owned 11 months.They are in the 28 percent marginal tax bracket.How much longer would they have to hold this stock to reduce the tax liability on this gain?

Household income is modified gross income increased by any excluded foreign income and tax-exempt interest.

A progressive tax is one that demands a higher percentage of a person's income as income increases.

Earned income is reported to the recipient on a

The yield on a tax-exempt municipal bond earning 5.0 percent is equivalent to ____ percent on a taxable corporate bond for a taxpayer in the 35 percent marginal tax bracket.

When you file your federal income tax you may take a subtraction from your taxable income called an exemption for each person legally defined as your

A regressive tax is one that demands a higher percentage of a person's income as income increases.

Which of the following is not defined as part of gross income?

Homeowners with appreciated principal residences can avoid tax on gains of up to $500,000 if married and filing jointly and up to $250,000 if single.The home must have been owned and used as the taxpayer's private residence for two out of the last five years prior to the date of sale.

Which of the following types of income is (are) excludable from federal income taxation?

Understanding Personal Finance

Career Planning

Financial Statements,tools,and Budgets

Managing Checking and Savings Accounts

Building and Maintaining Good Credit

Credit Cards and Consumer Loans

Vehicles and Other Major Purchases

Obtaining Affordable Housing

Managing Property and Liability Risk

Managing Health Expenses

Life Insurance Planning

Investment Fundamentals

Investing in Stocks and Bonds

Mutual Funds and Exchange Traded Funds

Real Estate and High-Risk Investments

Retirement and Estate Planning

Filters

A person who is claimed as a dependent on someone else's tax return can claim exemption(s) and at least a standard deduction on his or her own tax return.