1. During the current year, Blake had self-employment revenue of $200,000 and expenses of $80,000. In addition, he was an employee at another company earning W-2 wages of $60,000. Assume the social security wage cap is $100,000 for the current year. What is Blake's self-employment tax for the current year? a. $7,794 b. $8,174 c. $8,440 d. $9,937 e. $10,316 2. Which of the following statements is truc? a. A deduction of $1000 is better than a credit of $300 if the taxpayer is in the 24 % marginal rate bracket. b. A deduction ofS1000 is better for a taxpayer in the 24 % marginal rate bracket than for one in the 35 % bracket. c. A deduction of $1000 is better for a taxpayer in the 35 % marginal rate bracket than for one in the 24 % bracket. d. A credit of S1000 is better for a taxpayer in the 35% marginal rate bracket than for one in the 24% bracket. e. A credit of S1000 is better for a taxpayer in the 24% marginal rate bracket than for one in the 35% bracket. 3. Which of the following taxes is assessed only on employers and not on employees? d. Unemployment taxes e. Property taxes a. Income taxes b. Social security taxes c. Medicare taxes 4. Jacob is considering a business transaction. After speaking with his accountant, he has determined that the Internal Revenue Code is not clear on the tax treatment of his transaction. Because the tax dollars at stake are high, Jacob is not comfortable completing the transaction without first knowing how the transaction will be treated by the IRS. Which of the following would give Jacob the most piece of mind prior to completing the transaction? a. Private Letter Ruling b. Determination Letter c. Technical Advice Memorandum d. Article in a respectable taxation journal e. Commentary in a national tax service 5. Emma would like to challenge a tax deficiency assessed by the IRS on last year's tax return, and she already exhausted the IRS internal appeals process. Her lawver believes that the facts of her case may help Emma if she has a sympathetic audience. However, she is unable to pay the claim currently and her top priority is to utilize a court that does not require her to pay up-front. She does want to be able to appeal if the lower court does not render in her favor. Which court is the most appropriate for Emma? a. US Tax Court b. US District Court c. US Court of Federal Claims d. Small Tax Division of US Tax Court e. US Supreme Court 6. Which one of the following forms of business enterprise is NOT taxed at the individual owner level as a pass-through entity? a. Limited partnership b. S corporation c. Closely held C corporation d. Sole proprietorship 7. Josh, a single taxpayer, sold Dell stock which he had held for three years for $6,000, his cost basis being $2,000. In addition, he sold IBM stock for $4,000, having paid $5,000 for the stock three months earlier. Josh is in the 32% tax rate bracket. What will be his tax liability relative to these stock sales? a. $0 d. $1,050 e. $3,000 b. $250 c. $450 8. Which of the following is true regarding the individual tax formula? a. The tax savings from a deduction is the amount of the deduction itself. b. Exclusions are items of expenditure that are allowed to reduce taxable income. c. Itemized deductions are always beneficial to the taxpayer. d. The standard deduction amount is generally based on the taxpayer's filing status. e. The tax rate structure for individuals is proportional