1. Gina receives a $2,000 distribution from her educational savings account. She uses $1,600 to pay for qualified higher education expenses and $400 on a vacation. Immediately prior to the distribution, Gina’s account balance is $5,000, $2,500 of which is her contributions. What is Gina’s taxable income (after any exclusion) from the distribution?
a. $1,600
b. $1,000
c. $800
d. $200
e. Some other amount
2. Which of the following is correct for Qualified Tuition Programs?
a. Contributions are deductible, and qualified educational expense distributions are tax free.
b. Contributions are not deductible, and qualified educational expense distributions are tax free.
c. Contributions are deductible, and qualified educational expense distributions are taxable.
d. Contributions are not deductible, and qualified educational expense distributions are taxable.
3. In 2014, Amy receives $15,000 (of which $4,000 is earnings) from a qualified tuition program. She does not use the funds to pay for tuition or other qualified higher education expenses. What amount is taxable to Amy?
a. $0
b. $4,000
c. $11,000
d. $15,000
4. For married taxpayers filing a joint return in 2014, at what AGI level does the phase out limit for contributions to Qualified Tuition Programs start?
a. $110,000
b. $190,000
c. $220,000
d. There is no phase out limit on QTP contributions
5. Which of the following is not true with respect to education incentives?
a. The contributions to qualified tuition programs (Section 529 plans) are not deductible.
b. The contributions to educational savings accounts (Coverdell ESA) are not deductible.
c. Tuition paid by a taxpayer earning $300,000 of income is not deductible.
d. Married taxpayers must have income less than $100,000 to contribute to a qualified tuition program (Section 529 plan).
6. During 2014, Carl (a single taxpayer) has a salary of $90,500 and interest income of $15,500. Calculate the maximum contribution Carl is allowed for an educational savings account.
a. $2,000
b. $1,467
c. $533
d. $0
e. Some other amount
7. George receives a $1,500 distribution from his educational savings account. He uses $1,200 to pay for qualified higher education expenses. Immediately prior to the distribution, George’s account balance is $5,000, $3,000 of which is his contributions. What is George’s tax­free return of capital from the distribution?
a. $1,500
b. $1,200
c. $900
d. $750
e. $600
8. Ramon, a single taxpayer, has adjusted gross income for 2014 of $350,000. His itemized deductions total $50,000 consisting of $30,000 of state income taxes and $20,000 of charitable contributions. What is the amount of itemized deductions Ramon can claim after reduction for the itemized deduction phase out for high income taxpayers?
a. $2,874
b. $10,000
c. $47,000
d. $47,126
e. $50,000
9. Jim and Martha are married taxpayers with $400,000 of adjusted gross income in 2014. They are allowed two personal exemptions. What is the amount of each of their $3,950 exemption deductions after applying the phase out for high income taxpayers?
a. $0
b. $780
c. $948
d. $3,002
e. $1,027