Question 1

Interest paid on an underpayment of taxes (other than an underpayment of estimated taxes)is not subject to the consumer interest limitation.

Accepted Answer

A) True 
 B)False

Question 2

All paid tax return preparers must sign up with the IRS and obtain a preparer tax identification number.

Accepted Answer

A) True 
 B)False

Question 3

Mike deducts a bad debt on his 2018 tax return.How many years is the statute of limitations for the bad debt deduction?

Accepted Answer

A) Zero 
B) 3 years 
C) 6 years 
D) 7 years 
E) No limit 
A) Zero 
B) 3 years 
C) 6 years 
D) 7 years 
E) No limit

Question 4

The statute of limitations for a tax return generally is 3 years.

Accepted Answer

A) True 
 B)False

Question 5

Tax evasion involves the use of illegal methods to reduce or avoid income tax.

Accepted Answer

A) True 
 B)False

Question 6

Kendall is considering the purchase of a home.He has saved $22,000 for a down payment on a home and will finance the remainder of the purchase price with a home mortgage loan.Kendall currently rents an apartment for $1,200 per month and does not anticipate an increase in his monthly income.He wants to make sure that the monthly payment on his new home does not exceed $1,200, after-tax.Kendall has a marginal tax rate of 25 percent and an average tax rate of 22 percent.Assuming the monthly mortgage payment (before-tax)will be equal to 1 percent of the initial mortgage balance and the entire amount of each monthly payment will be deductible home mortgage interest, what is the maximum amount that Kendall can spend on a new home?

Accepted Answer

$182,000, determined as $22,000 down pay

Interest paid on an underpayment of taxes (other than an underpayment of estimated taxes)is not subject to the consumer interest limitation.

All paid tax return preparers must sign up with the IRS and obtain a preparer tax identification number.

Mike deducts a bad debt on his 2018 tax return.How many years is the statute of limitations for the bad debt deduction?

The statute of limitations for a tax return generally is 3 years.

Tax evasion involves the use of illegal methods to reduce or avoid income tax.

The Individual Income Tax Return

Gross Income and Exclusions

Additional Income Part 1

Additional Income Part 2

Deductions and Adjustments to Income

Accounting Methods and Taxes

Tax Credits

Depreciation and Sale of Business Property

Payroll, Estimated Payments, and Retirement Plans

Partnership Taxation

The Corporate Income Tax

Filters

Exam 12: Tax Administration and Tax Planning

Interest paid on an underpayment of taxes (other than an underpayment of estimated taxes)is not subject to the consumer interest limitation.

All paid tax return preparers must sign up with the IRS and obtain a preparer tax identification number.

Mike deducts a bad debt on his 2018 tax return.How many years is the statute of limitations for the bad debt deduction?

The statute of limitations for a tax return generally is 3 years.

Tax evasion involves the use of illegal methods to reduce or avoid income tax.

The Individual Income Tax Return

Gross Income and Exclusions

Additional Income Part 1

Additional Income Part 2

Deductions and Adjustments to Income

Accounting Methods and Taxes

Tax Credits

Depreciation and Sale of Business Property

Payroll, Estimated Payments, and Retirement Plans

Partnership Taxation

The Corporate Income Tax

Filters