1. Heather's interest and gains on investments for the tax year are below. What is her gross income from these investments?

Interest on U.S. government bonds: $500

Interest on Bland County school bonds: $900

Interest on a Virginia income tax refund: $100

Gain on the sale of Bland County: $1000

A. $1,500 B. $1,600 C. $2,000 D. $2,500

2. Andy has owned his home for 5 years. He has paid the taxes listed below. What amount can he deduct as an itemized deduction on Schedule A of his return?

Real Estate taxes on rental property he owns: $3,000

Real estate taxes on his own residence: $6,500

Federal income taxes: $4,000

State income taxes: $3,500

Local city income taxes: $1,500

A. $7,000 B. $10,000 C. $11,500 D. $13,500

3. Which of the following events would produce a deductible loss?

A. Erosion of personal use land due to a sudden and turbulent rain, wind, or wild fire that has been set illegally and was attributed to arson by persons unknown.

B. Termite infestation of a personal residence over a several year period.

C. Damages to a personal automobile resulting from a taxpayer's willful negligence

D. Flood damaged personal property by a flood for which presidential disaster area declaration has been made

4. As a general rule, income from property is taxed to the person who

A. Owns the property B. Benefits from the property C. Receives the income D. Is the assignee of income

5. Indicate whether or not each item is a capital asset

A. Investment in Bonds B. Stock held for investment C. Family car D. Residential rental property E. Accounts receivable

F. Copyright held by inventor G. Depreciable business property H. Real estate held for business purposes

I. Wedding ring J. Stamp collection of hobbyist