I want answers to all of the following questions:
1. Which of the following is NOT a primary tax authority?
a. Treasury Regulation
b. Revenue Ruling
c. a Tax Court Memorandum decision
d. an IRS publication
2. Congressâ authority to enact an income tax was establishedbyâ¦
a. Article III of theConstitution.
b. the Sixteenth Amendment.
c. the Bill of Rights.
d. the Declaration of Independence.
3. Which of the following has the highest authoritativeweight?
a. Treasury regulation
b. Private letter ruling
c. Revenue Ruling
d. Revenue Procedure
4. Which judicial doctrine means that a court will ruleconsistently with its previous rulings and the rulings of highercourts with appellate jurisdiction?
a. judicial hierarchy
b. the Goldman rule
c. judicial consistency
d. stare decisis
5. Which type of Treasury regulation has the highestauthoritative weight?
a. an interpretiveregulation
b. a procedural regulation
c. a legislative regulation
d. None, all have the same level of authority.
6. Sec. 162(a)(2) is a reference toâ¦
a. Treasury Regulation number162, section A, subsection 2.
b. Code section 162, subsection a, paragraph 2.
c. Code section 162, clause a, subclause 2.
d. Section 162(a)(2) of the compendium of Tax Court decisions.
7. In order to determine whether tax authorities cited are stillvalid and up to date, an individual doing tax research willconsultâ¦
a. an annotated taxservice.
b. a topical tax service.
c. a citator.
d. IRS notices.
Criterian 2
1. As a general rule individual taxpayers are required to file atax return ifâ¦
a. they receive a W-2 and havefederal tax withheld
b. they are not a dependent of another taxpayer.
c. their gross income is more than the standard deduction andpersonal exemption amounts for their filing status.
d. their gross income is more than the standard deduction and thepersonal and dependency exemption amounts claimed on theirreturn.
2. Which of the following shows the correct relationship amongstandard deduction amounts for the respective filing statuses?
a. Single > Head of Household> Married Filing Jointly
b. Married Filing Jointly > Married Filing Separately > Headof Household
c. Married Filing Jointly > Head of Household > Single
d. Head of Household > Married Filing Separately > MarriedFiling Jointly
NEW3. John and Maryâs divorce become final onDecember 15. Neither of them remarried, and neither of them has anychildren. Their tax filing status should beâ¦
a. married filingseparately.
b. married filing jointly.
c. either a or b
d. single
NEW4. In order to qualify as a taxpayerâsdependent, an individual must beâ¦
a. a qualifying familymember.
b. a qualifying child or a qualifying relative.
c. a descendant or an ancestor of the taxpayer.
d. under the age of 19, or a full-time student under the age of24.
NEW5. In order to qualify for head of householdstatus, a taxpayer mustâ¦
a. be unmarried and pay morethan half the costs of providing a home for a qualifying person forthe entire year.
b. be a divorced parent with legal custody of at least onechild.
c. be unmarried or considered unmarried and pay more than half thecosts of providing a home for a qualifying person for a least halfthe year.
d. be unmarried and provide a home for at least one othertaxpayer.
NEW6. Which of the following individuals isrequired to file a tax return?
a. John, age 66, who is single,and whose income consists of $22,000 in social security benefitsand a $4,800 pension.
b. George, age 25 and single, whose W-2 shows $5,000 wages and $600in federal withholding.
c. Mary, age 27 and single, whose W-2 shows $4,000 in wages, andhas net income from self-employment of $500.
d. all of the above
NEW7. Tom and Ruth want to file as marriedfiling separately. If Tom wants to itemize his casualty losses,thenâ¦
a. they must file jointly.
b. Ruth must take the standard deduction.
c. Ruth must either itemize her deductions or claim a zero standarddeduction.
d. none of the above
Criterion 3
NEW1. Which of the following items would beincluded in gross income?
a. Interest from a municipalbond.
b. An inheritance.
c. Unemployment benefits.
d. Child support.
NEW2. Under what circumstances must a personreport taxable income?
a. Always.
b. Always, unless the income is only from interest.
c. Always, unless the income is so small that a tax return is notrequired.
d. Always, unless the person is identified as a dependent onsomeone elseâs return.
NEW3. Which of the following types of income issubject to preferred (lower) tax rates?
a. Interest on savingsaccounts.
b. Interest from a credit union.
c. Qualified dividends.
d. all of the above
NEW4. In 2015, Cheryl, who is single and not adependent of another taxpayer, has taxable income of $30,000. Usingthe abbreviated 2015 tax schedule for single filers below, computeher tax liability. $ 0 to $ 9,225 10% , $9,225 to $37,450 15%
a. $4,039.
b. $4,500.
c. $5,423.
d. none of the above
NEW5. Using the same facts as in the questionabove, compute Cherylâs tax liability if her income consisted of$26,000 in wages and $4,000 in long term capital gains.
a. $4,500.
b. $4,039.
c. $3,840.
d. $3,439.
NEW6. Referring to the facts in Question 4,what would Cherylâs tax liability be if the $30,000 included $6,000she withdrew from her IRA to pay off her credit cards. Cheryl is35.
a. $4,039.
b. $4,500.
c. $4,639.
d. $5,239.
NEW7. Which of the following taxpayers isrequired to take a minimum distribution from their retirementaccount?
a. Pete, who has a 401-K and isage 68 and retired.
b. Roger, who has a 401-K with his employer, and is still workingat age 73.
c. Don, who is still working at age 71, and has an IRA.
d. Roger and Don, but not Pete.
Criterion 4
NEW1. Which of the following is NOT anadjustment to income?
a. a penalty on early withdrawalfrom savings
b. sales taxes paid
c. a portion of the self-employment tax paid by a self-employedtaxpayer
d. qualifying moving expenses
NEW2. Tom made payment totaling $12,800 to hisex-wife this year. His divorce from Rita became final in 2014, andRita was granted sole custody of their son, Anthony. According tothe Decree, Tom is required to pay Rita $1,000 a month untilAnthony reaches the age of 18. After Anthony reaches turns 18, Tomis required to pay Rita $350 a month until the end of 2017 unlessshe remarries. Tom also provided $800 to help pay for Anthonyâsbraces. The amount of these payment that can be deducted as anadjustment to income isâ¦
a. $12,800.
b. $12,000.
c. $7,800.
d. $4,200.
NEW3. James, an unmarried student aged 20, hadgross income of $22,000 this year. His income consisted of $4,000in wages and $18,000 in investment income received from a trust.The maximum he can contribute to an IRA isâ¦
a. $5,500.
b. $5,000.
c. $4,000.
d. $0.
NEW4. Brentâs only investment income this yearwas $200 of interest earned on a certificate of deposit. He paid$5,400 of home mortgage interest, $780 interest on his car loan,and $400 in margin interest on loans to buy stock. His deductibleinterest isâ¦
a. $5,400.
b. $5,600.
c. $5,800.
d. $6,580.
NEW5. Georgie, age 30, incurred $11,200 inqualifying medical expenses this year. If her AGI is $55,000, herdeduction for medical expenses on Schedule A will beâ¦
a. $11,200.
b. $7,075.
c. $5,700.
d. $5,500.
NEW6. Carl paid the following taxes in 2015:$3,600 in state income taxes withheld from his paycheck, a $250balance due on his 2014 state income tax return, $350 inself-employment tax, $1,500 in property taxes on his home, and$2,000 special assessment collected by the city for sidewalks onhis street. His deductible taxes on Schedule A will beâ¦
a. $3,500.
b. $2,100.
c. $5,700
d. $5,350.
NEW7. Michelle has the following miscellaneousitemized deductions: professional publications related to her job -$240, professional licenses and professional association dues â$560, commuting expenses - $1020, and tax preparation - $200. Ifher AGI is $35,000, her deduction for job related and miscellaneousexpenses on Schedule A will beâ¦
a. $2,020.
b. $1,320.
c. $300.
d. $800.
Criterion 5
NEW1. Which of the following assets is notsubject to deprecation?
a. Warehouse
b. Printing press
c. Mineral deposit
d. Office furniture
NEW2. Tax depreciation is currently calculatedunder what system?
a. Accelerated cost recoverysystem
b. Modified accelerated cost recovery
c. Straight line
d. Sum of the years digits
NEW3. Little Company purchased a $2,000computer for use in its main office. This asset that is depreciatedover 5 years for federal tax purposes. For five year assets, firstyear depreciation is 20%, second year depreciation is 32%, andthird year depreciation is 19.2%. The computer was sold during thethird year. At the time of sale, the adjusted basis would beâ¦
a. $1,000.
b. $800.
c. $768.
d. $576.
NEW4. Robert, who is single, recently sold hishome in 2015 for $375,000. He has lived there since he bought thehouse in 1990 for $100,000. How should this transaction be reportedon his tax return?
a. He will report an ordinarygain of $275,000.
b. He will report a long term capital gain of $275,000.
c. He will report a long term capital gain of $25,000.
d. This transaction does not have to be reported because itinvolves the sale of his residence.
NEW5. The sale of machinery for more than theoriginal cost basis (before depreciation), used in a trade orbusiness, and held for more than one year results in the followingtypes of gain or loss?
a. Capital only
b. Ordinary only
c. Capital and §1231
d. §1245 and §1231
NEW6. Marty purchased 100 shares of QPX stockfor $12,000 on March 15, 2015. He also paid his broker a $50commission on the purchase. On August 30, 2015, he sold all 100shares for $15,050. No commission was paid on the sale of thestock. Which of the following statements most accurate describesthe effect of this sale on Martyâs tax liability?
a. He will have a capital gainof $3,050, which will be taxed at ordinary rates.
b. He will have a capital gain of $3,050, which will be taxed atlower capital gains rates.
c. He will have a capital gain of $3,000, which will be taxed atordinary rates.
d. He will have a capital gain of $3,000, which will be taxed atlower capital gains rates.
NEW7. For federal tax purposes, real propertyis depreciated using the ______________ convention.
a. mid-month
b. mid-quarter
c. half-year
d. whole-year
Criterion 6
NEW1. Fairness requiresâ¦
a. disclosure of conflicts ofinterest.
b. impartiality.
c. intellectual honesty.
d. all of the above
NEW2. The Internal Revenue Code imposes apenalty on tax practitioners for any position taken on a returnthat is not supported by substantial authority. This penalty can beavoided ifâ¦
a. the practitioner does notsign the return.
b. the position is not frivolous.
c. the position has a reasonable basis and is disclosed on thereturn.
d. none of the above
NEW3. Which of the following statements iscorrect with respect to a clientâs request to a tax practitionerfor the return of the clientâs records?
a. The practitioner may neverreturn records of the client to the client, even if the clientrequests the prompt return of the records.
b. The existence of a dispute over fees always relieves thepractitioner of his or her responsibility to return records of theclient to the client.
c. The practitioner must, at the request of the client, promptlyreturn the records of the client to the client unless applicablestate law provides otherwise.
d. The practitioner must return the clientâs personal papers, butnot tax reporting documents, such as the clientâs W-2s and1099s.
NEW4. Which of the following is considered atax return preparer?
a. A neighbor who assists in thepreparation of a depreciation schedule.
b. A son who enters tax return information into a computer programand prints a return.
c. A woman who prepares tax returns in her home during filingseason and accepts payment for her services.
d. A volunteer at a local church who prepares tax returns butaccepts no payment.
NEW5. Tax preparers are prohibited fromâ¦
a. advertising theirservices.
b. offering other services, such as bookkeeping, in addition to taxpreparation.
c. offering discounts to repeat customers.
d. negotiating their clientsâ refund checks.
NEW6. Sarah, a tax preparer, is reviewing theprior year return of a new client, she discovers a mistake thatresulted in an understatement of the clientâs tax liability forthat year. She shouldâ¦
a. report the matter to theIRS.
b. refuse to accept the new client.
c. advise the client that an amended return should beprepared.
d. include the unpaid amount in her calculation of this yearâstax.
NEW7. Which of the following cannot be includedin a tax preparerâs advertising?
a. The preparerâs professionalcredentials, such as CPA, EA, etc.
b. Areas of specialization, such as farm returns
c. The availability of e-filing services
d. The names of some of the preparerâs more prominent clients
I want answers to all of the following questions:
1. Which of the following is NOT a primary tax authority?
a. Treasury Regulation b. Revenue Ruling c. a Tax Court Memorandum decision d. an IRS publication |
2. Congressâ authority to enact an income tax was establishedbyâ¦
a. Article III of theConstitution. b. the Sixteenth Amendment. c. the Bill of Rights. d. the Declaration of Independence. |
3. Which of the following has the highest authoritativeweight?
a. Treasury regulation b. Private letter ruling c. Revenue Ruling d. Revenue Procedure |
4. Which judicial doctrine means that a court will ruleconsistently with its previous rulings and the rulings of highercourts with appellate jurisdiction?
a. judicial hierarchy b. the Goldman rule c. judicial consistency d. stare decisis |
5. Which type of Treasury regulation has the highestauthoritative weight?
a. an interpretiveregulation b. a procedural regulation c. a legislative regulation d. None, all have the same level of authority. |
6. Sec. 162(a)(2) is a reference toâ¦
a. Treasury Regulation number162, section A, subsection 2. b. Code section 162, subsection a, paragraph 2. c. Code section 162, clause a, subclause 2. d. Section 162(a)(2) of the compendium of Tax Court decisions. |
7. In order to determine whether tax authorities cited are stillvalid and up to date, an individual doing tax research willconsultâ¦
a. an annotated taxservice. b. a topical tax service. c. a citator. d. IRS notices. |
Criterian 2
1. As a general rule individual taxpayers are required to file atax return ifâ¦
a. they receive a W-2 and havefederal tax withheld b. they are not a dependent of another taxpayer. c. their gross income is more than the standard deduction andpersonal exemption amounts for their filing status. d. their gross income is more than the standard deduction and thepersonal and dependency exemption amounts claimed on theirreturn. |
2. Which of the following shows the correct relationship amongstandard deduction amounts for the respective filing statuses?
a. Single > Head of Household> Married Filing Jointly b. Married Filing Jointly > Married Filing Separately > Headof Household c. Married Filing Jointly > Head of Household > Single d. Head of Household > Married Filing Separately > MarriedFiling Jointly |
NEW3. John and Maryâs divorce become final onDecember 15. Neither of them remarried, and neither of them has anychildren. Their tax filing status should beâ¦
a. married filingseparately. b. married filing jointly. c. either a or b d. single |
NEW4. In order to qualify as a taxpayerâsdependent, an individual must beâ¦
a. a qualifying familymember. b. a qualifying child or a qualifying relative. c. a descendant or an ancestor of the taxpayer. d. under the age of 19, or a full-time student under the age of24. |
NEW5. In order to qualify for head of householdstatus, a taxpayer mustâ¦
a. be unmarried and pay morethan half the costs of providing a home for a qualifying person forthe entire year. b. be a divorced parent with legal custody of at least onechild. c. be unmarried or considered unmarried and pay more than half thecosts of providing a home for a qualifying person for a least halfthe year. d. be unmarried and provide a home for at least one othertaxpayer. |
NEW6. Which of the following individuals isrequired to file a tax return?
a. John, age 66, who is single,and whose income consists of $22,000 in social security benefitsand a $4,800 pension. b. George, age 25 and single, whose W-2 shows $5,000 wages and $600in federal withholding. c. Mary, age 27 and single, whose W-2 shows $4,000 in wages, andhas net income from self-employment of $500. d. all of the above |
NEW7. Tom and Ruth want to file as marriedfiling separately. If Tom wants to itemize his casualty losses,thenâ¦
a. they must file jointly. b. Ruth must take the standard deduction. c. Ruth must either itemize her deductions or claim a zero standarddeduction. d. none of the above |
Criterion 3
NEW1. Which of the following items would beincluded in gross income?
a. Interest from a municipalbond. b. An inheritance. c. Unemployment benefits. d. Child support. |
NEW2. Under what circumstances must a personreport taxable income?
a. Always. b. Always, unless the income is only from interest. c. Always, unless the income is so small that a tax return is notrequired. d. Always, unless the person is identified as a dependent onsomeone elseâs return. |
NEW3. Which of the following types of income issubject to preferred (lower) tax rates?
a. Interest on savingsaccounts. b. Interest from a credit union. c. Qualified dividends. d. all of the above |
NEW4. In 2015, Cheryl, who is single and not adependent of another taxpayer, has taxable income of $30,000. Usingthe abbreviated 2015 tax schedule for single filers below, computeher tax liability. $ 0 to $ 9,225 10% , $9,225 to $37,450 15%
a. $4,039. b. $4,500. c. $5,423. d. none of the above |
NEW5. Using the same facts as in the questionabove, compute Cherylâs tax liability if her income consisted of$26,000 in wages and $4,000 in long term capital gains.
a. $4,500. b. $4,039. c. $3,840. d. $3,439. |
NEW6. Referring to the facts in Question 4,what would Cherylâs tax liability be if the $30,000 included $6,000she withdrew from her IRA to pay off her credit cards. Cheryl is35.
a. $4,039. b. $4,500. c. $4,639. d. $5,239. |
NEW7. Which of the following taxpayers isrequired to take a minimum distribution from their retirementaccount?
a. Pete, who has a 401-K and isage 68 and retired. b. Roger, who has a 401-K with his employer, and is still workingat age 73. c. Don, who is still working at age 71, and has an IRA. d. Roger and Don, but not Pete. |
Criterion 4
NEW1. Which of the following is NOT anadjustment to income?
a. a penalty on early withdrawalfrom savings b. sales taxes paid c. a portion of the self-employment tax paid by a self-employedtaxpayer d. qualifying moving expenses |
NEW2. Tom made payment totaling $12,800 to hisex-wife this year. His divorce from Rita became final in 2014, andRita was granted sole custody of their son, Anthony. According tothe Decree, Tom is required to pay Rita $1,000 a month untilAnthony reaches the age of 18. After Anthony reaches turns 18, Tomis required to pay Rita $350 a month until the end of 2017 unlessshe remarries. Tom also provided $800 to help pay for Anthonyâsbraces. The amount of these payment that can be deducted as anadjustment to income isâ¦
a. $12,800. b. $12,000. c. $7,800. d. $4,200. |
NEW3. James, an unmarried student aged 20, hadgross income of $22,000 this year. His income consisted of $4,000in wages and $18,000 in investment income received from a trust.The maximum he can contribute to an IRA isâ¦
a. $5,500. b. $5,000. c. $4,000. d. $0. |
NEW4. Brentâs only investment income this yearwas $200 of interest earned on a certificate of deposit. He paid$5,400 of home mortgage interest, $780 interest on his car loan,and $400 in margin interest on loans to buy stock. His deductibleinterest isâ¦
a. $5,400. b. $5,600. c. $5,800. d. $6,580. |
NEW5. Georgie, age 30, incurred $11,200 inqualifying medical expenses this year. If her AGI is $55,000, herdeduction for medical expenses on Schedule A will beâ¦
a. $11,200. b. $7,075. c. $5,700. d. $5,500. |
NEW6. Carl paid the following taxes in 2015:$3,600 in state income taxes withheld from his paycheck, a $250balance due on his 2014 state income tax return, $350 inself-employment tax, $1,500 in property taxes on his home, and$2,000 special assessment collected by the city for sidewalks onhis street. His deductible taxes on Schedule A will beâ¦
a. $3,500. b. $2,100. c. $5,700 d. $5,350. |
NEW7. Michelle has the following miscellaneousitemized deductions: professional publications related to her job -$240, professional licenses and professional association dues â$560, commuting expenses - $1020, and tax preparation - $200. Ifher AGI is $35,000, her deduction for job related and miscellaneousexpenses on Schedule A will beâ¦
a. $2,020. b. $1,320. c. $300. d. $800. |
Criterion 5
NEW1. Which of the following assets is notsubject to deprecation?
a. Warehouse b. Printing press c. Mineral deposit d. Office furniture |
NEW2. Tax depreciation is currently calculatedunder what system?
a. Accelerated cost recoverysystem b. Modified accelerated cost recovery c. Straight line d. Sum of the years digits |
NEW3. Little Company purchased a $2,000computer for use in its main office. This asset that is depreciatedover 5 years for federal tax purposes. For five year assets, firstyear depreciation is 20%, second year depreciation is 32%, andthird year depreciation is 19.2%. The computer was sold during thethird year. At the time of sale, the adjusted basis would beâ¦
a. $1,000. b. $800. c. $768. d. $576. |
NEW4. Robert, who is single, recently sold hishome in 2015 for $375,000. He has lived there since he bought thehouse in 1990 for $100,000. How should this transaction be reportedon his tax return?
a. He will report an ordinarygain of $275,000. b. He will report a long term capital gain of $275,000. c. He will report a long term capital gain of $25,000. d. This transaction does not have to be reported because itinvolves the sale of his residence. |
NEW5. The sale of machinery for more than theoriginal cost basis (before depreciation), used in a trade orbusiness, and held for more than one year results in the followingtypes of gain or loss?
a. Capital only b. Ordinary only c. Capital and §1231 d. §1245 and §1231 |
NEW6. Marty purchased 100 shares of QPX stockfor $12,000 on March 15, 2015. He also paid his broker a $50commission on the purchase. On August 30, 2015, he sold all 100shares for $15,050. No commission was paid on the sale of thestock. Which of the following statements most accurate describesthe effect of this sale on Martyâs tax liability?
a. He will have a capital gainof $3,050, which will be taxed at ordinary rates. b. He will have a capital gain of $3,050, which will be taxed atlower capital gains rates. c. He will have a capital gain of $3,000, which will be taxed atordinary rates. d. He will have a capital gain of $3,000, which will be taxed atlower capital gains rates. |
NEW7. For federal tax purposes, real propertyis depreciated using the ______________ convention.
a. mid-month b. mid-quarter c. half-year d. whole-year |
Criterion 6
NEW1. Fairness requiresâ¦
a. disclosure of conflicts ofinterest. b. impartiality. c. intellectual honesty. d. all of the above |
NEW2. The Internal Revenue Code imposes apenalty on tax practitioners for any position taken on a returnthat is not supported by substantial authority. This penalty can beavoided ifâ¦
a. the practitioner does notsign the return. b. the position is not frivolous. c. the position has a reasonable basis and is disclosed on thereturn. d. none of the above |
NEW3. Which of the following statements iscorrect with respect to a clientâs request to a tax practitionerfor the return of the clientâs records?
a. The practitioner may neverreturn records of the client to the client, even if the clientrequests the prompt return of the records. b. The existence of a dispute over fees always relieves thepractitioner of his or her responsibility to return records of theclient to the client. c. The practitioner must, at the request of the client, promptlyreturn the records of the client to the client unless applicablestate law provides otherwise. d. The practitioner must return the clientâs personal papers, butnot tax reporting documents, such as the clientâs W-2s and1099s. |
NEW4. Which of the following is considered atax return preparer?
a. A neighbor who assists in thepreparation of a depreciation schedule. b. A son who enters tax return information into a computer programand prints a return. c. A woman who prepares tax returns in her home during filingseason and accepts payment for her services. d. A volunteer at a local church who prepares tax returns butaccepts no payment. |
NEW5. Tax preparers are prohibited fromâ¦
a. advertising theirservices. b. offering other services, such as bookkeeping, in addition to taxpreparation. c. offering discounts to repeat customers. d. negotiating their clientsâ refund checks. |
NEW6. Sarah, a tax preparer, is reviewing theprior year return of a new client, she discovers a mistake thatresulted in an understatement of the clientâs tax liability forthat year. She shouldâ¦
a. report the matter to theIRS. b. refuse to accept the new client. c. advise the client that an amended return should beprepared. d. include the unpaid amount in her calculation of this yearâstax. |
NEW7. Which of the following cannot be includedin a tax preparerâs advertising?
a. The preparerâs professionalcredentials, such as CPA, EA, etc. b. Areas of specialization, such as farm returns c. The availability of e-filing services d. The names of some of the preparerâs more prominent clients |