41

Marks: 1 

How will a capital gain distribution from a REIT be reported on the income tax return if Schedule D is not required to be filed?

Choose one answer. 

a. Directly on Form 1040, line 7. 

b. Directly on Form 1040, line 13. 

c. On Schedule A with Form 4952. 

d. Schedule D will then be required. 

Question 42

Marks: 1 

A taxpayer who is claiming dependents can use any form except:

Choose one answer. 

a. Form 1040 

b. Form 1040-A 

c. Form 4868 

d. Form 1040-EZ 

Question 43

Marks: 1 

Hannibal, age 66, is single and is not claimed as a dependent on another return. Hannibal has a statement from his eye doctor stating that he is legally blind. What is the total amount of the standard deduction that Hannibal can claim?

Choose one answer. 

a. $9,450 

b. $7,900 

c. $6,350 

d. $3,100 

Question 44

Marks: 1 

Larry works for Merit and Merit Bookkeeping as an accountant. As part of his employment package he is able to make contributions to his 401(k) plan from his wages. His employer makes a matching contribution of 3% to the 401(k). How will the 401(k) contributions be handled on Larry's Form W-2?

Choose one answer. 

a. Employee contributions are reported in box 1, and employer contributions are reported in box 12. 

b. Employee contributions are reported in box 12 as deferred compensation, and employer compensation is not reported. 

c. Employee contributions are not reported, and employer contributions are reported in box 14. 

d. Employee contributions are reported in box 14, and employer contributions are included in box 1. 

Question 45

Marks: 1 

Joyce is a widowed taxpayer whose husband Willard passed away on July 31, 2016. Joyce and Willard had purchased a home for $215,000 on September 12, 2003 and lived in the home as their main home until Willard's death. Joyce moved in with her daughter after Willard's death, and sold the home on April 30, 2017 for $595,000. How much of the gain on the sale can Joyce exclude from taxable income?

Choose one answer. 

a. $500,000, the maximum exclusion for an unmarried surviving spouse 

b. $380,000, the amount of gain on the sale of the home. 

c. $250,000, the maximum exclusion amount for a single taxpayer. 

d. $0, because she moved out before she sold the home. 

Question 46

Marks: 1 

When volunteering time and/or services to a qualified charitable organization, you can deduct as a charitable contribution all of the following, except:

Choose one answer. 

a. Cost and upkeep of uniforms worn while performing donated services that are not suitable for general use. 

b. Value of your time or service. 

c. Unreimbursed transportation expenses that relate directly to the services you gave. 

d. Any cash contributions you made to the organization for which you gave services. 

Question 47

Marks: 1 

A single taxpayer, over age 65, is required to file a return if he or she has gross income of at least:

Choose one answer. 

a. $4,050 

b. $10,400 

c. $11,950 

d. $13,400 

Question 48

Marks: 1 

Exemptions may be taken for dependents. When is a spouse deemed to be a dependent?

Choose one answer. 

a. If the taxpayer takes an exemption for the spouse. 

b. Never 

c. If the spouse is disabled. 

d. If the spouse does not file a return. 

Question 49

Marks: 1 

Which of the following is a disqualification for the child and dependent care credit?

Choose one answer. 

a. Payments made for the care of a spouse who is physically unable to care for him/herself while the taxpayer is working. 

b. Payments made for child care while the taxpayer does unpaid volunteer work. 

c. Payments made to a relative who is not claimed as the taxpayer's dependent. 

d. Payments made for care when a spouse is a full-time student. 

Question 50

Marks: 1 

How are qualified dividends reported on the income tax return if Schedule B is not required to be filed?

Choose one answer. 

a. Directly on Form 1040, line 9b. 

b. Directly on Form 1040, line 13. 

c. As an adjustment to income on Form 1040, line 26. 

d. As a subtraction from income on Form 1040, line 21.

51

Marks: 1 

An amount in Form W-2, box 10 is showing that the taxpayer received:

Choose one answer. 

a. Dependent care benefits included in box 1. 

b. Dependent care benefits not included in box 1. 

c. Advance additional child tax credit. 

d. Advance earned income credit. 

Question 52

Marks: 1 

Amounts received from money market funds are:

Choose one answer. 

a. Dividend income 

b. Interest income 

c. Capital gains 

d. Nontaxable gains 

Question 53

Marks: 1 

Hazel sold her home in 2017 for a contract sales price of $285,000. The buyer paid $5,000 down payment plus a camper valued at $1,200. Hazel agreed to receive the camper at the value of $1,200 as part of the down payment for a total down payment of $6,200. Hazel had a mortgage on the home for $196,000 that was to be paid off from the proceeds of the sale. What is Hazel's sales price of the home she sold?

Choose one answer. 

a. $285,000 

b. $283,800 

c. $278,800 

d. $89,000 

Question 54

Marks: 1 

John is a single taxpayer. His taxable income on Form 1040, line 43 is $71,810. John will use which method to figure the tax on his taxable income.

Choose one answer. 

a. Tax table 

b. Tax rate schedule 

c. Percentage method 

d. None of the above 

Question 55

Marks: 1 

Rental income and expenses are reported on which form or schedule?

Choose one answer. 

a. Schedule A 

b. Schedule E 

c. Form 4952 

d. Form 4652 

Question 56

Marks: 1 

Irving and Sarah are married filing jointly. They are both employed and covered by retirement plans through their employers. They will not be able to deduct contributions to their traditional IRAs if their Modified AGI is what amount?

Choose one answer. 

a. $119,000 or more 

b. $99,000 or less 

c. $72,000 or more 

d. $62,000 or less 

Question 57

Marks: 1 

A taxpayer must pay the balance owed by the due date of the return to:

Choose one answer. 

a. Avoid late-payment penalties and interest. 

b. Receive an A+ credit rating. 

c. Be eligible to file Form 1040-A. 

d. Receive a refund of next year's overpayment. 

Question 58

Marks: 1 

Which of the following statements is not correct for reporting a hobby on an income tax return?

Choose one answer. 

a. Hobby income is reported on Form 1040, line 21. 

b. Hobby income and expenses are reported on Schedule C, but Schedule SE is not required to be filed. 

c. Hobby expenses are reported on Schedule A, line 23. 

d. Hobby expenses are limited to the amount of hobby income reported on the return. 

Question 59

Marks: 1 

Job expenses and Miscellaneous deductions are all of the following except:

Choose one answer. 

a. Deductions for ordinary and necessary business expenses you incur as an employee. 

b. Expenses related to producing or managing income or paying taxes. 

c. Expenses that exceed 2% of your AGI. 

d. Reported on Schedule A, line 28. 

Question 60

Marks: 1 

Jack is a self-employed contractor. He uses his Ford F250 in his business. He does not have another vehicle for personal use. He wants to claim the standard mileage rate for the business use of his pick-up. To do so he must keep records of the following, except:

Choose one answer. 

a. Total mileage during the year 

b. Business mileage during the year 

c. Commuting mileage during the year 

d. Cost of insurance for the pick-up.