Incorrect

Question 1

How much is the QBI deduction?

Answer 1

20% of qualified business income

Question 2

How much $ can be excluded from gross income for payments made by an employer for educational expenses?

Answer 2

Up to $5,250

Question 3

Is interest received on state and local bonds/obligations taxable?

Answer 3

No, tax exempt

Question 4

Is scholarships for room and board taxable?

Answer 4

Yes

Question 5

What is the SEP IRA deduction?

Answer 5

The lessor of $69,000 or
20% of net earnings

Question 6

When deducting medical expenses what do you use and how do you calculate it?

Answer 6

You use a AGI floor by multiplying AGI by 7.5%. Add up the total expenses and subtract by AGI floor to get the deduction

Question 7

Are state taxes paid an itemized deduction

Answer 7

Yes

Question 8

What is the limit when deducting long term capital gain property at the FMV

Answer 8

30% of AGI

Question 9

What are the two broad categories for above the line deductions?

Answer 9

1. Profit motive deductions (business expenses)
2. Adjustments

Question 10

Does gross income matter for the definition of dependent for the medical expense deduction?

Answer 10

No

Question 11

Is interest on qualified education loans deductible for or from agi?

Answer 11

For as an adjustment

Question 12

Is a personal automobile a capital asset?

Answer 12

Yes

Question 13

What is the maximum IRA deduction

Answer 13

$7000 for single

Question 14

How much depreciation is taken for the month that real property is disposed of?

Answer 14

One half month

Question 15

What is the maximum time you are able to file for a refund?

Answer 15

Up to 3 years after the original due date including extensions or 2 years after actual payment.

Question 16

How to qualify for the Section 179 expense deduction?

Answer 16

-The property must be used in the taxpayers business
-Purchased from an unrelated party

Question 17

What does a personal holding company consist of?

Answer 17

Considered a personal holding company if 60% of adjusted ordinary gross income consists of:
-dividends
-taxable interest
-royalties
-net rent

Question 18

What is adjusted taxable income (ATI)

Answer 18

Income for the year excluding all interest income and interest expense

Question 19

What is floor plan financing?

Answer 19

Debt used to acquire motor vehicles held for sale or lease where the debt is secured by the acquired inventory

Question 20

When can a business deduct all of their interest expenses?

Answer 20

When AVG gross receipts is less then $30 million

Question 21

How are dividends received by a partnership treated?

Answer 21

Treated as separately stated income by the partnership, taxable to the partner

Question 22

What is the net section 123 gain(loss) ?

Answer 22

An asset that was used in the business that held for at least 3 years and sold.

Question 23

A CPA may receive a contingent fee for…

Answer 23

successfully concluding an internal revenue service examination of an original tax return

Question 24

A covered opinion includes…

Answer 24

any written or electronic ADVICE concerning transactions as listed transactions

Question 25

What are the requirements for written advice (Circular 230)

Answer 25

The practitioner must use reasonable efforts to identify and ascertain the facts relevant to written advice on each federal tax matter

Question 26

Is workers comp included in gross income?

Answer 26

No

Question 27

On which date does the holding period of a partnership’s interest acquired in exchange for a contributed capital asset begin?

Answer 27

The date the partner’s holding period of the capital asset began.

Question 28

If a situation involves a "guarantor of collection," the creditor is required

Answer 28

to proceed against the debtor first, and only when the creditor is unable to collect from the debtor, is the creditor allowed to go after the surety.

Question 29

The three-factor formula is based on

Answer 29

property, payroll, and sales factors

Question 30

Under the liability provisions of Section 10, Rule 10b-5 the plaintiff must prove that:

Answer 30

- Loss was suffered as a result of the misstatements - Information was relied upon - Error - grossly negligent or scienter.

Question 31

kiddie tax rules prevent parents and grandparents in high tax brackets from

Answer 31

shifting income (especially from investments) to children in lower tax brackets. Kiddie tax is applicable for: - A child who is 17 years or younger at year end; or -A child is 18 years of age at year end and the child doesn’t have earned income that exceeds half of his or her support; or -A child with age 19 to 23 at year-end, he / she is a student (attends college for five months during the year) and doesn’t have earned income that exceeds half of his or her support.

Question 32

The Sherman Antitrust Act prohibits

Answer 32

contracts, combinations, and conspiracies that restrain trade and monopolize.

Question 33

For partnership basis distributed property is calculated at its

Answer 33

basis

Question 34

If an individual paid income tax in year 1 but did not file a year 1 return because his income was insufficient to require the filing of a return, the deadline for filing a refund claim is

Answer 34

Two years from the date the tax was paid

Question 35

Any exempt organization must file a business income tax return and pay income taxes on

Answer 35

unrelated business income (UBI) in excess of $1,000

Question 36

What is Anticipatory repudiation?

Answer 36

The renunciation of a bilateral contract before performance is due is an anticipatory breach which gives the non-breaching party several options (one of which issuing immediately for anticipatory repudiation

Question 37

What is Promissory estoppel

Answer 37

is an equitable remedy used in situations where your remedy at law is unjust (there is no indication from the facts in this problem that promissory estoppel would apply).

Question 38

What is accord and satisfaction?

Answer 38

applies in circumstances where there is an unliquidated debt and there is a good faith offer to settle this disputed debt.

Question 39

What depreciation method do residential and nonresidential real property use?

Answer 39

Mid-month convention

Question 40

Are consulting fees and director fees included in self employment income?

Answer 40

Yes

Question 41

In an S corporation is a loan included in calculating basis?

Answer 41

No

Question 42

What are the two cases where you have to pay the deficiency before the trial?

Answer 42

In cases tried in the federal district court and the US court of federal claims

Question 43

This form can be used to amend returns or claims of refund taxes that were erroneously paid

Answer 43

1040x

Question 44

who is responsible for electing officers?

Answer 44

The board of directors

Question 45

Who is responsible for electing board members?

Answer 45

Shareholders

Question 46

When are rental losses from active participation partially deductible?

Answer 46

When AGI is less than $150000

Question 47

For income to be taxable on a tax return, it must be...

Answer 47

both realized and recognized

Question 48

What is taxable income and how is it related to charitable contributions?

Answer 48

Taxable income is calculated before the deduction of: any charitable contributions, the drd, and any capital loss carryback. Its related to charitable contributions because you use the taxable income for the 10% maximum deduction of their taxable income

Question 49

he primary activity of most 501(c)(3) private foundations is

Answer 49

making grants to other charitable organizations and individuals.

Question 50

Are compensatory damages taxes?

Answer 50

Yes

Question 51

If a member of an LLC dies what happens to the LLC?

Answer 51

It is dissolved unless the other members consent to continue

Question 52

What is strict liability?

Answer 52

The concept of strict liability normally ap­plies to merchant sellers. Strict liability provides that a merchant seller is strictly liable for the physical harm or property damage experienced by the ultimate consumer if the product was in a defective condition and unrea­sonably dangerous to the user.

Question 53

When disposing of personal property are losses allowed?

Answer 53

No, losses are not deducted but gains are fully taxable