6. A self-employed taxpayer buys a new business automobile during the year. What method is permitted in computing car and truck expenses on Schedule C? a. The actual cost method. b. The standard mileage rate method. c. Either the actual cost or the standard mileage rate method. d. The actual mileage method. e. None of the above. 7. Interest expenses eligible for deduction as itemized deductions inelude all of the following except: a, interest on a $20,000 home equity loans to make personal purchases. b. interest on student loans. c. points paid on the purchase of the taxpayer's main home. d. interest incurred to purchase land to be held as an investment. e. all of the above are interest expense deductible as itemized deductions. 8. Lori purchased educational savings bonds to help finanee her son's education. She paid $4,000 for the bonds. The bonds matured at $6,000, and the son used $2,500 to pay his tuition for the first semester. The son quit school after one semester and Lori used the remaining money to buy her son a car. If Lori's AGI is \$55,000, how much interest is included in her gross income? a. 50 b. $833 c. $1,167 d. $750 e. $2,000 9. Rhonda is single and receives the following income during the year: $30,000 taxable pension, $6,000 in social security payments, and $1,000 of interest on State of Iowa bonds. What is Rhonda's adjusted gross income based on the above information? a. $36,000 b. $34,500 c. $33,000 d. $30,000 e. None of the above 10. Which of the following taxpayers qualifies to claim the child tax credit: a. A taxpayer who files as head of household and claims his 18-year-old daughter as a dependent. b. A divorced taxpayer who claims his 15-year-old son as a dependent. The son lives most of the year with the ex-wife. The taxpayer was given the dependency exemption when the ex-wife signed away her right to the exemption. c. A 25-year-old unmarried taxpayer who claims her 10-year-old sister as a dependent. d. both b. and c. e. both a, and b. 11. Which of the following persons can the taxpuyer clain as a dependent? Assume that each of the following onmumid persons live with the tuxpayer during the year. a. The taxpoyer's 13-year-old dawghter who has 54,500 of interest incame b. The taxpayer's 70-year-old parear whe dies during the year and has no gross income c. The taxpaycr's 15-ycat-old aiece who las en grons income d. None of the ahove can be claimed as the taypyer's dependert c. All of the above persons can be chimed as the taxpuyer's dependent 12. A married couple has a net shon-term capital hoss of $2,000 and a aet long-term capital loss of S3,000 for the year. If the couple has no other gains or losses, what, if anythirs, camis over to the next year? a. $2,000 shont-term capital less b. $2,000 long-term capital loss c. \$2,000 shoft-term capinal lass; \$3,000 long-1cme capial loss d. 5500 short-term capital loss $1,500 long-terme chital loss c. The couple has no capital less carryovar 13. Several years ago, Kurt paid $15,000 foe 1,000 shanes of stock in ABC. During the current year ABC declares a three-for-one stock split. Shortly thereafter, Kurt sells 1,000 shares of ABC sock for $12,000. His recogaized gain on the sale of the 1,000 stases is: a. $3,000. b. $2,000. c. 50 . d. $12,000 e. $5,000. 14. A vacition home is rented oel for 10 days dering the year and exed pernonally by the ewner for 20 days during the year, What pereentage of real estate taxes should be dedacted on Schodale A? a. 0% b. 33% c. 67% 4. 100n e. none of the above. 15.The creffit for small enployer health inserance peerniums is moe avatlable to: a. employers that employ mote than 10 full fime equivalent (FTE) employecs. b, employers that pay less than 5006 of their amployees' health insurance promiums. c. cmployers whose conployec's wages average moec than $27,806 in 2021 . d. both a. and c. e. all of the above. 16. The MACRS basis of 5-year property acquired en March 3.20X1 is $10,000. The property is sold on November 4, 20X2. If the hali-year coevention applies to persoeal property acpuired in 201 and the regular (accelerated) MACRS method is esed, depreciasion expense in 202 is: a. $2,000 b. 51,000 c. $1,600 d. $3,200 c. 52,800 17. cash-basis sole peoporicaoe had the following casb roccips and disburiement for the year: Net sales \$No, oco Cost of evods sold 40,000 Opereting expenses 20,000 Freployoc payrall tanes 3,000 Dividend income 900 Interest income from a persenal saving account 200 What is the amount of roported net profit reported on Sebedule Cl ? a. $20,000 b. 540,000 c. $17,000 d. 515,000 e. $18,000 18. Justina purchasod a vacation bone en March lit of the current year. In conjunction with the pachase she puid $3,000 in points to obtain a lower interest rate on her 15-ycar morterge. Fow mach of the $3,000 can Justina doduct in the current year? a. $3.000 b. $200 c. $1) d $167 c. none of the abone 19. Molly's employer oflen an adoption asistunce program. Molly's AGI for 2022 is $70000. If Melly's employer reimburses her $25,450 for her adoption costs, the atmosnt Melly will be taxed on is: a. 50 , b. 510,560 . c. 55,000. d. $10,000. c. 514,440 20. Paul pays his formact wife Mas $3,100 in alimumy and $400 it child support each month. The diverce became final before 2019. Assuming John malkes all 12 pryments during the year, how mach of the $42,000 must Mary inclode in grons incoerse? a. $37,200. b. 542,000 . c. 54,800 d $0 c. None of the above. 21. Duriog the year, a mamed coepie pays 57,500 in qualified child care expeases to a nunny to look afier their \&year-eld son. The busband works and has $56,000 of eager durise the year, the wife attended college full-time studeat for in morms of the year. Based on the conple's ACI, the percernipe they can use to compule their child and dependent eare eredit is 26%. The eocple's etaild asd dependent care crodit is: a. 5910 . b. 5780 . c. $650. d. $1,000 c. SD 22. Abby, age 34, is single and has adfistod gross inoome of $32,400. She has $3,500 of itermined dolactices and wants to poy the least amount of tax. What is ber 2002 trukle incothe? a. 515.950 . b. 519,450 . c. $22,950. d $28,900. c. 532,400 . 6. A self-employed taxpayer buys a new business automobile during the year. What method is permitted in computing car and truck expenses on Schedule C? a. The actual cost method. b. The standard mileage rate method. c. Either the actual cost or the standard mileage rate method. d. The actual mileage method. e. None of the above. 7. Interest expenses eligible for deduction as itemized deductions inelude all of the following except: a, interest on a $20,000 home equity loans to make personal purchases. b. interest on student loans. c. points paid on the purchase of the taxpayer's main home. d. interest incurred to purchase land to be held as an investment. e. all of the above are interest expense deductible as itemized deductions. 8. Lori purchased educational savings bonds to help finanee her son's education. She paid $4,000 for the bonds. The bonds matured at $6,000, and the son used $2,500 to pay his tuition for the first semester. The son quit school after one semester and Lori used the remaining money to buy her son a car. If Lori's AGI is \$55,000, how much interest is included in her gross income? a. 50 b. $833 c. $1,167 d. $750 e. $2,000 9. Rhonda is single and receives the following income during the year: $30,000 taxable pension, $6,000 in social security payments, and $1,000 of interest on State of Iowa bonds. What is Rhonda's adjusted gross income based on the above information? a. $36,000 b. $34,500 c. $33,000 d. $30,000 e. None of the above 10. Which of the following taxpayers qualifies to claim the child tax credit: a. A taxpayer who files as head of household and claims his 18-year-old daughter as a dependent. b. A divorced taxpayer who claims his 15-year-old son as a dependent. The son lives most of the year with the ex-wife. The taxpayer was given the dependency exemption when the ex-wife signed away her right to the exemption. c. A 25-year-old unmarried taxpayer who claims her 10-year-old sister as a dependent. d. both b. and c. e. both a, and b. 11. Which of the following persons can the taxpuyer clain as a dependent? Assume that each of the following onmumid persons live with the tuxpayer during the year. a. The taxpoyer's 13-year-old dawghter who has 54,500 of interest incame b. The taxpayer's 70-year-old parear whe dies during the year and has no gross income c. The taxpaycr's 15-ycat-old aiece who las en grons income d. None of the ahove can be claimed as the taypyer's dependert c. All of the above persons can be chimed as the taxpuyer's dependent 12. A married couple has a net shon-term capital hoss of $2,000 and a aet long-term capital loss of S3,000 for the year. If the couple has no other gains or losses, what, if anythirs, camis over to the next year? a. $2,000 shont-term capital less b. $2,000 long-term capital loss c. \$2,000 shoft-term capinal lass; \$3,000 long-1cme capial loss d. 5500 short-term capital loss $1,500 long-terme chital loss c. The couple has no capital less carryovar 13. Several years ago, Kurt paid $15,000 foe 1,000 shanes of stock in ABC. During the current year ABC declares a three-for-one stock split. Shortly thereafter, Kurt sells 1,000 shares of ABC sock for $12,000. His recogaized gain on the sale of the 1,000 stases is: a. $3,000. b. $2,000. c. 50 . d. $12,000 e. $5,000. 14. A vacition home is rented oel for 10 days dering the year and exed pernonally by the ewner for 20 days during the year, What pereentage of real estate taxes should be dedacted on Schodale A? a. 0% b. 33% c. 67% 4. 100n e. none of the above. 15.The creffit for small enployer health inserance peerniums is moe avatlable to: a. employers that employ mote than 10 full fime equivalent (FTE) employecs. b, employers that pay less than 5006 of their amployees' health insurance promiums. c. cmployers whose conployec's wages average moec than $27,806 in 2021 . d. both a. and c. e. all of the above. 16. The MACRS basis of 5-year property acquired en March 3.20X1 is $10,000. The property is sold on November 4, 20X2. If the hali-year coevention applies to persoeal property acpuired in 201 and the regular (accelerated) MACRS method is esed, depreciasion expense in 202 is: a. $2,000 b. 51,000 c. $1,600 d. $3,200 c. 52,800 17. cash-basis sole peoporicaoe had the following casb roccips and disburiement for the year: Net sales \$No, oco Cost of evods sold 40,000 Opereting expenses 20,000 Freployoc payrall tanes 3,000 Dividend income 900 Interest income from a persenal saving account 200 What is the amount of roported net profit reported on Sebedule Cl ? a. $20,000 b. 540,000 c. $17,000 d. 515,000 e. $18,000 18. Justina purchasod a vacation bone en March lit of the current year. In conjunction with the pachase she puid $3,000 in points to obtain a lower interest rate on her 15-ycar morterge. Fow mach of the $3,000 can Justina doduct in the current year? a. $3.000 b. $200 c. $1) d $167 c. none of the abone 19. Molly's employer oflen an adoption asistunce program. Molly's AGI for 2022 is $70000. If Melly's employer reimburses her $25,450 for her adoption costs, the atmosnt Melly will be taxed on is: a. 50 , b. 510,560 . c. 55,000. d. $10,000. c. 514,440 20. Paul pays his formact wife Mas $3,100 in alimumy and $400 it child support each month. The diverce became final before 2019. Assuming John malkes all 12 pryments during the year, how mach of the $42,000 must Mary inclode in grons incoerse? a. $37,200. b. 542,000 . c. 54,800 d $0 c. None of the above. 21. Duriog the year, a mamed coepie pays 57,500 in qualified child care expeases to a nunny to look afier their \&year-eld son. The busband works and has $56,000 of eager durise the year, the wife attended college full-time studeat for in morms of the year. Based on the conple's ACI, the percernipe they can use to compule their child and dependent eare eredit is 26%. The eocple's etaild asd dependent care crodit is: a. 5910 . b. 5780 . c. $650. d. $1,000 c. SD 22. Abby, age 34, is single and has adfistod gross inoome of $32,400. She has $3,500 of itermined dolactices and wants to poy the least amount of tax. What is ber 2002 trukle incothe? a. 515.950 . b. 519,450 . c. $22,950. d $28,900. c. 532,400
