REG 1B

Question 1

In a case of marrief filling joint, if one spouse dies the surviving spouse remains unmarried, then his status is?

Answer 1

in the case the surviving spouse remains unmarried till the end of year two then he would be considered single.

Question 2

expiry limit of gross fraud and gross negligence in tax filing is?

Answer 2

6 years

Question 3

what is form 1040EZ

Answer 3

allows only standard deductions not itemised deductions

Question 4

What can be refund of income tax paid in a form containing only standard deduction?

Answer 4

Only interest on it is taxable

Question 5

Inadvertent ommission of taxable income

Answer 5

if simple error or negligence, 3 years
if gross negligence (>25%) then 6 years
fraud understatement, indefinite period

Question 6

claim of refund can be filed?

Answer 6

1) 3 years of date of filing of return including extensions

2) 2 years of actual payment

Question 7

Cash basis method of accounting exceptions

Answer 7

1) entities designated as cash shelter
2) entities involved in purchase sale and manufacture
3) C-Corps whose gross income exceeds $5 million
4) Partnership with C-Corp partner and gross reciepts exceeding $5million

Question 8

C-Corp uses which method of accounting

Answer 8

accrual method

Question 9

A calendar-year individual filed an income tax return on April 1, this can be amended no later than

Answer 9

amended tax returns 3 years or 2 years as the case maybe

Question 10

A cash basis taxpayer should report gross income

Answer 10

A cash basis taxpayer should recognise income the earlier of actual or constructive reciept, whether in cash or property

Question 11

Cost of maintaining household includes

Answer 11

1. rent
2. repairs
3. property tax
4. mortgage interest
5. propetry insurance
6. utilities and food consumed

Question 12

A C corporations must use the accrual method of accounting in which circumstances

Answer 12

a c corp that has an average gross annual reciepts of over $5 million

Question 13

When can one file MFJ

Answer 13

When a couple is married as long as they are not divorced or legally separated

Question 14

For taxable purposes payment is kind is evaluated as?

Answer 14

property received against payment is valued at FMV

Question 15

What are Uniform Capitalisation rules

Answer 15

costs related to personal, real and inventory property that needs to be capitalised. eg: pre-production, production and pre-sale