1. The following represent elements of the tax formula for individual taxpayers:

A. Income from any source

B. Itemized deductions

C. Deductions for A.G.I.

D. Exclusions from gross income

E. Standard deduction amount

Which of the items listed are considered in arriving at A.G.I.?

a. A, C, and D

b. A, D, and E

c. A, B, and D

d. A, B, and C

2. B, a single taxpayer with no dependents, has income and deductions for 2021 that are summarized as follows:

Gross income $27,100

Deductions for A.G.I. 2,175

Itemized deductions 11,000

Non-refundable income tax credit 300

Federal income tax withheld 1,500

Based on these facts, what is Bs tax due or (refund) for 2021? (Note: Use the tax rate schedules on the inside back cover, even though you should not when taxable income is less than $100,000. All of Bs taxable income is ordinary income).

	a.	$315 overpayment
	b.	$328 overpayment
	c.	$514 overpayment
	d.	$1,663 overpayment
	e.	$3,252 due

3. Which of the following is not a correct observation related to the comparison between a deduction and a credit?

	a.	A deduction of $100 is less valuable than a credit of $100.
	b.	A deduction of $100 is more valuable to a 40 percent bracket taxpayer than is a $30 credit.
	c.	A deduction of $100 is more valuable to a 40 percent bracket taxpayer than it is to a 30 percent bracket taxpayer.
	d.	A credit of $100 is more valuable to a 40 percent bracket taxpayer than it is to a 30 percent bracket taxpayer.

4. W sold a parcel of land that he had owned for three years for $4,000 cash, and the buyer assumed a note secured by the property in the amount of $6,000. W originally paid $7,500 for the land. What is his gain (or loss) realized on the sale?

	a.	$10,000
	b.	$6,000
	c.	$2,500
	d.	($3,500)

5. J sold the following capital assets during the current year:

100 shares of X Corp. held 14 months $(500) loss

50 shares of T Corp. held 4 months (240) loss

City lot held 7 years for speculation 900 gain

How much is J's overall net capital gain or loss, if any?

	a.	$740 LTCL
	b.	$660 LTCG
	c.	$400 LTCG
	d.	$160 LTCG
	e.	Zero