1. On January 15, 2015, Jim filed automatic extension because he did not receive a report ofincome from a partnership. What is the due date for Jim to file his personal income tax return?

A. 10/15/2015

B. 06/15/2015

C. 04/15/2015

D. 03/15/2015

2.

Which of the following statements regarding tip income is true?

A. If the taxpayer is an indirectly tipped employee (for example, a busser or bartender) heor she is not required to report tips to an employer

B. Any tips the taxpayer reported to an employer are to be included in the wages in box 1(Wages, tips, other compensation) of his or her Form W-2

C. If the only tips a taxpayer receives in a month are charged tips (for example, credit anddebit card charges) distributed to him or her by an employer, he or she not required toreport these tips to the employer

D. If the only tips a taxpayer receives in a month are cash tips, he or she is not required toreport these tips to the employer

3. Emily Smith files her tax return on the basis of a fiscal year. Her records show that she receivedincome in November 2013 and February 2014 from which there was backup withholding ($100and $50, respectively). Emily takes credit for what amount of backup withholding on her taxreturn for the fiscal year ending September 30, 2014?

A. $0

B. $50

C. $100

D. $150

4. Andy originally reported $21,000 as his adjusted gross income on his 2014 Form 1040. Hereceived another Form W-2 for $500 after he filed his return. Which of the following is true?

A. Andy should file another Form 1040 for 2014

B. Andy should re-file Form 1040 for 2014

C. Andy should include the $500 on his 2015 Form 1040

D. Andy should use Form 1040X - Amended U.S. Individual Income Tax Return to correctthe Form 1040

5. Every employer engaged in a trade or business who pays remuneration, including noncashpayments of what amount or more for the year for services performed by an employee must filea Form W-2 - Wage and Tax Statement for each employee (assuming no income, Social Security,or Medicare tax was withheld)?

A. $500

B. $600

C. $700

D. $800

6. Company ABC provides a dependent care assistance flexible spending arrangement to itsemployees through a cafeteria plan. In addition, it provides occasional on-site dependent careto its employees at no cost. Emily, an employee of Company ABC, had $4,500 deducted from her pay for the dependent care flexible spending arrangement. In addition, Emily used the on-sitedependent care several times. The fair market value of the onsite care was $700. Emily's FormW-2 should report $5,200 of dependent care assistance in Box 10. If all other conditions are Page 3 of 9met, what is the maximum amount excludable from gross income for the dependent careexpenses Emily can report on her tax return?

A. $700

B. $2,500

C. $4,500

D. $5,000

7. Randall lived apart from his spouse from July 10 to December 31, but he was not divorced orlegally separated at the end of the year. What filing status is Randall eligible to use on his taxreturn?

A. Single

B. Head of Household

C. Married, filing separately

D. None of the above

8. Eduardo, who is 64 years of age and single, received wages of $15,000, interest income of$3,000, dividends of $2,000, municipal bond interest of $7,000 and state unemploymentcompensation of $3,000. What is Eduardos Federal gross income?

A. $15,000

B. $18,000

C. $23,000

D. $27,000

9. Which of the following are adjustments to Federal gross income?

A. Interest paid on delinquent credit card bills

B. Interest on a personal loan

C. Interest from car payments

D. Moving expenses

10. Mike is unmarried. His dependent daughter, Sara, lived with him all year. Property taxes of$1,000 and mortgage interest of $4,000 on the home where he and Sara live are divided equallywith his ex-wife. Mike paid the utilities of $100 per month. What portion of the yearlyhousehold expenses allows him to qualify for head of household filing status?

A. $1,000

B. $2,500

C. $3,700

D. $5,600

11. The taxpayer is generally allowed one exemption for his or herself. If married, he or she may beallowed an exemption for his or her spouse if which of the following is true?

A. His or her spouse is considered the taxpayers dependent

B. The taxpayer and his or her spouse are filing a joint return

C. Another taxpayer is entitled to claim his or her spouse as a dependent

D. The taxpayer and his or her spouse file a separate return and his or her spouse had grossincome less than $5,000

12. A taxpayer can claim an exemption for a person who files a joint return if that person and his orher spouse file the joint return only to claim which of the following?

A. American Opportunity Credit

B. Lifetime Learning Credit

C. Estimated tax paid Page 4 of 9

D. Interest paid

13. Sean and Dianne are a married couple filing jointly. For 2014, their adjusted gross income (AGI)is $452,000. For 2014, Sean and Diannes personal exemptions total what amount?

A. $0

B. $5,200

C. $7,800

D. $7,900

14. While on vacation in Las Vegas Jennifer, who is from Utah, wins a progressive jackpot playing aslot machine worth $15,875 at the Casino Royale. What implication does she encounter whenshe goes to collect her prize?

A. The State of Utah withholds 25% of her winnings

B. The Casino Royale withholds 15% of her winnings when she collects her prize

C. The Casino Royale withholds 25% of her winnings when she collects her prize

D. The Casino Royale withholds 30% of her winnings when she collects her prize

15. Herman is covered by a cafeteria plan by his employer. His adjusted gross income (AGI) is$100,000. He paid unreimbursed medical premiums in the amount of $10,500 and he itemizesdeductions. What amount will Herman be able to deduct for his medical insurance premiumexpenses?

A. $500

B. $1,000

C. $3,000

D. $5,250

16. Carol pays $500 a month for the premiums on her health insurance policy and receives amonthly reimbursement of the same amount from her employer and is required to use it forthose premiums. What amount of the reimbursement is considered taxable income?

A. $0

B. $100

C. $250

D. $275

17. Penelope Summers received certain income benefits in 2014. She received $1,400 of stateunemployment insurance benefits, $2,000 from a Federal Unemployment Trust Fund and$3,700 workers compensation received for an occupational injury. What amount of thecompensation must Penelope include in her income?

A. $1,400

B. $3,400

C. $3,700

D. $5,700

18. Which of the following are examples of expenses that may be deducted from total rentalincome?

A. Fixing leaks in the plumbing

B. Putting a recreation room in an unfinished basement

C. Paneling a den that previously had wallpaper

D. Adding a bathroom or a spare bedroomPage 5 of 9

19. On April 6, 2014 Ben purchased a house to use as residential rental property. He made extensiverepairs to the house and had it ready for rent on July 5, 2014. He began to advertise the housefor rent in July and actually rented it beginning September 1, 2014. When is the houseconsidered to be placed in service for the purposes of rental expenses?

A. January 1, 2014

B. April 6, 2014

C. July 5, 2014

D. September 1, 2014

20. On September 1, 2012, Steve loaned Brett $2,000 at 12% interest compounded annually. Steveis not in the business of lending money. The note stated that principal and interest would be dueon August 31, 2014. In 2014, Steve received $2,508.80 ($2,000 principal and $508.80 interest).Steve uses the cash method of accounting. What amount must Steve include in income on his2014 return?

A. $0

B. $508.80

C. $1,254.40

D. $2,508.80

21. Nonresident aliens are not taxed on certain kinds of interest income provided that such interestincome arises from which of the following sources?

A. U.S. savings and loan association

B. U.S. credit union

C. U.S. insurance company

D. All of the above

22. Laura sold her house. Her amount realized after selling expenses was $385,000. At the time ofthe sale, the adjusted basis for the house was $300,000. If all of other conditions are met, whatis the gain on the sale of her house?

A. $0

B. $42,500

C. $85,000

D. $300,000

23. The individual taxpayer uses Schedule D for all of the following except:

A. To report nonbusiness bad debts

B. To figure the overall gain or loss from transactions reported on Form 8949

C. To report a gain from Form 2439

D. To report a gain or loss from Form 4684

24. Which of the following is considered a taxpayers capital asset?

A. Taxpayers house

B. Real estate used in the trade or business

C. Depreciable property used in the trade or business

D. Supplies regularly used in the trade or business

25. Christian owns two homes, one in Oregon and one in New Hampshire. In 2010 and 2011, helived in the Oregon home. In 2012 and 2013, he lived in the New Hampshire home. In 2014, he Page 6 of 9lived again in the Oregon home. Which of the following statements is true regarding Christianseligibility to exclude the gain on the sale of his homes in 2014?

A. He would be eligible to partially exclude the gain from the sale of the Oregon home in2014

B. He would not be eligible to exclude the gain from the sale of the New Hampshire homein 2014

C. He would not be eligible to exclude the gain from the sale of the Oregon home in 2014

D. He would be eligible to exclude the gain from the sale of either home in 2014

26. Justin is a self-employed contractor and was living in a townhouse in Oregon he had owned andused as his main home since 2007. He got a job in North Carolina and sold his townhouse in2014. Based on Justin's new place of employment and the home he sold, which of the followingis true?

A. He is entitled to claim the entire maximum exclusion of gain from the sale

B. He is entitled to claim a reduced maximum exclusion of gain from the sale

C. He is not entitled to claim a reduced maximum exclusion of gain from the sale

D. Justin's sale of his home is not considered to be because of a change in place ofemployment

27. The income earned from a sole proprietorship is subject to Medicare and Social Securitycontributions. What is the wage base limit for the 2.9% Medicare tax?

A. $55,050

B. $113,700

C. $117,000

D. No Limitation

28. Joe Smith, a sole proprietor, had gross income of $8,000, a bad debt deduction of $300, andother allowable deductions of $7,700. He also had two personal exemptions for a total of$7,900. If Joe recovers any part of the $300, in any future year, what amount will he will reportas income?

A. $0

B. $50

C. $100

D. $200

29. When determining whether an individual is an independent contractor or an employee, which ofthe following can be used to make this determination?

A. If the individual is compensated for services provided then they are an employee

B. If the individual is compensated for services provided then they are an independentcontractor

C. If the individual withholds taxes on a payment for services then the individual is anindependent contractor

D. If an employer withholds income taxes, withholds and pays Social Security and Medicaretaxes, and pays unemployment tax on wages paid, then the individual is an employee

30. When considering whether an activity is a hobby or a business, which of the following is correct?

A hobby is defined as an activity done regularly in one's leisure time for pleasure anddoes not result in a profit

B. Schedule C can be used to report income derived from a hobby

C. An activity is a business if it makes a profit during at least three of the last five tax years,including the current year

D. All of the above

31. Dustin is a sole-proprietor who owns a small business that makes business cards for othercompanies. He started the company in 2014 and had $4,800 in total business expenses for theyear. Which of the following applies to Dustins small business?

A. Dustin must use Schedule C when filing the business return

B. Dustin can use Schedule C-EZ because he had less than $5,000 of expenses

C. Dustin can use Schedule A because he had less than $5,000 of expenses

D. Dustin does not have to file a Schedule C or C-EZ because his business had less than$5,000 in expenses

32. Kirk decides to use the simplified option for his home office deduction on his 2014 tax return. Hefigures he uses 200 square feet of his home for business. What is his allowable home officededuction?

A. $0

B. $600

C. $1,000

D. $2,000

33. The taxpayer can deduct any expenses paid or incurred for a membership at all of the followingorganizations except:

A. Civic or public service organizations

B. Airline and hotel clubs

C. Professional organizations (such as bar and medical associations)

D. Trade associations

34. . Harvey is the sole proprietor of a flower shop. He drove his van 20,000 miles during the year.16,000 miles were for delivering flowers to customers and 4,000 miles were for personal use.Instead of figuring actual expenses, Harvey decides to use the standard mileage rate to figurethe deductible costs of operating his van. What amount can Harvey claim as the cost ofoperating his van as a business expense?

A. $0

B. $4,480

C. $8,960

D. $9,040

35. Jessica paid $1,500 for electricity during the tax year. She used one-third of the electricity forpersonal purposes and two-thirds for farming. Under these circumstances, Jessica can deductwhat amount of her electricity expense as a farm business expense?

A. $0

B. $500

C. $750

D. $1,000

36. Wendy is a single taxpayer with adjusted gross income of $92,300 for tax year 2014. She hasrental income of $55,000 and rental expenses of $80,000. What can Wendy report on her taxreturn given this situation?

A. She can deduct $10,000 because her rental expenses exceeded her rental income

B. She can deduct $15,000 because her rental expenses exceeded her rental income

C. She can deduct $25,000 because her rental expenses exceeded her rental income

D. She can deduct $30,000 because her rental expenses exceeded her rental income

37. . Sandy is a single taxpayer who collected Social Security benefits of $22,000. The Social Securitybenefits were her only income for the tax year. What is the amount of taxes she will owe whenshe files her income tax return?

A. $0

B. $2,200

C. $5,500

D. $11,000

38. George, who is 34 years old and single, earns $24,000 in 2014. His IRA contributions for 2014 are limited to what amount?

A. $0

B. $1,000

C. $3,500

D. $5,500

39. Joe is 57 years old and unemployed. He decides to take an early withdrawal or distribution fromhis IRA to make ends meet. Which of the following apply to Joe as a result of this transaction?

A. Joe incurs a 10% Federal penalty because he withdrew funds for an unqualified purposebefore he was 59 years old

B. Joe incurs a 15% Federal penalty because he withdrew funds for an unqualified purposebefore he was 59 years old

C. Joe incurs a 20% Federal penalty because he withdrew funds for an unqualified purposebefore he was 59 years old

D. Joe does not incur a penalty because he is over the age of 55

40. Lori and Mike, both 42 years old, have been married for 20 years and have two children ages 14and 17. Mike has worked at Computer Corp. while Lori stayed home taking care of the kids.Once all the kids entered high school Lori decided she wanted to go back to college and finishher degree. Mike uses his IRA funds to pay for the tuition, books, supplies and associated feesfor Lori to return to college. Which of the following apply as a result of this transaction?

A. They incur a 10% Federal penalty for withdrawing funds before 59 years old

B. They incur a 15% Federal penalty for withdrawing funds before 59 years old

C. They incur a 20% Federal penalty for withdrawing funds before 59 years old

D. They incur no penalty since the funds were used for a qualified higher educationalexpense and Lori is Mikes spouse

41. For a Roth IRA, a payment or distribution is not a qualified distribution if it is made less thanhow many tax years from the first tax year in which the individual made a contribution?

A. 2 years

B. 3 year

sC. 4 years

D. 5 yearsPage

42. . In June, Alvaro discovered his house had been burglarized. His loss after insurancereimbursement was $2,000. His adjusted gross income for the year he discovered the theft is$29,500. What amount can Alvaro claim as a theft loss deduction?

A. $0

B. $100

C. $1,790

D. $1,900

43. Shannon won $1,000 in a poker tournament she entered in May. In July and September, she lost$600 and $700 in two other tournaments. She reported $1,000 of gambling winnings on Form1040. What amount can Shannon deduct as gambling losses for the year on Schedule A?

A. $600

B. $700

C. $1,000

D. $1,300

44. For purposes of the Earned Income Credit, which of the following is a requirement for a qualifying child?

A. Is over age 24 at the end of 2014 and not permanently and totally disabled

B. Has lived with the taxpayer in the United States for at least 12 months

C. Is filing a joint return

D. Meets the relationship test