attached is a quiz with 25 easy questions from individual tax accounting class

Quiz 1 Name___________________________ 1. Compute gross income for a single (unmarried) taxpayer who has income that consists of: Gross salary Interest on bank savings account $19,600 1,410 Interest on municipal bond Interest on corporate bond 150 250 Ordinary dividend income from mutual fund 300 Cash prize in State of Illinois lotto game 1,000 Year-end Bonus received from Employer 2,000 a. b. c. d. e. $24,710. $24,560. $24,260. $24,010. None of the above. Answer: _____ 2. Choose the statement that applies to Andy, a 14-year-old child, who earned $2,200 mowing lawns during the summer. Andy also had interest income of $400. a. Andy's parents must include the $400 of interest income on their tax return. b. The $400 of unearned income is taxed at his parents' tax rate. c. Andy must file his own return. d. Form 8615 is used to compute Andy's income tax. e. All of the above. Answer: _____ 3. On July 1, 2014, a dance studio received $3,600 for 72 dance lessons to be given over the next 3 years. Thirty lessons were given in both 2014 and 2015. The remaining 12 lessons were given in 2016. The studio (which uses the accrual method) includes what amount in gross income in 2015? a. b. c. d. e. $1,800 $2,100 $0 $1,500 $1,200 Answer: _____ 4. A 10-year-old who lives with her parents has $5,300 in interest income for 2015. The child's net unearned income is: a. b. c. d. e. $0. $4,250. $5,300. $1,400. $3,200. Answer: _____ 5. On July 1, 2015, Sam loaned his son $150,000 to purchase a new house. The loan is for ten years with no interest. The son has no investment income. If the applicable federal rate (AFR) is 10%, what amount of imputed interest will Sam report in gross income in 2015? a. b. c. d. e. $0 $15,000 $7,500 $2,500 None of the above Answer: _____ 6. Thomas, age 8, received taxable interest of $1,850 and dividends of $2,550 during the year. He has no other income, and no itemized deductions. Thomas is a dependent of his parents, who have taxable income of $72,000. If Thomas' parents do not elect to report his income on their return, how much of Thomas' income will be taxed at his parents' tax rate? a. b. c. d. e. $0 $2,300 $4,400 $400 $3,350 Answer: _____ 7. Which of the following items is included in an accrual basis taxpayer's gross income? a. Receipt of a $10,000 payment for goods to be delivered next year b. Receipt of $10,000 for services that will be provided next year c. Receipt of a $10,000 payment for goods delivered last year d. All of the above e. None of the above Answer: _____ 8. Dan's taxable income falls in the 15% tax bracket. Included in his taxable income is $5,000 of ordinary dividends, of which $2,000 are qualified dividends. The amount of tax Dan will pay on his qualified dividends is: a. b. c. d. e. $0. $300. $250. $100. $200. Answer: _____ 9. An employee receives $100 in tips during March. She reports the tips to her employer. Which of the following statements is correct regarding tips? a. The employer adds the $100 to the employee's wages and withholds income, social security, and Medicare taxes on the amount. b. The employer reports the $100 as allocated tips on the employee's W-2. c. The employer adds the tips to the employee's wages and withholds income taxes, but not social security or Medicare taxes, on the amount. d. The employer adds the tips to the employee's wages and withholds social security and Medicare taxes, but not income taxes, on the amount. e. None of the above. Answer: _____ 10. In 2014, an unmarried taxpayer deducted $6,750 of itemized deductions since that amount exceeded the $6,200 standard deduction amount. Included in the itemized deductions was $3,700 of state income tax withheld. In 2015, the taxpayer receives an $800 refund check from the state government. What amount must the taxpayer include in his 2015 gross income? a. $0 b. $550 c. $750 d. $800 e. $1,600 Answer: _____ 11. Which of the following items results in gross income to Sandy? a. Workers' compensation for an injury received while working in her employer's factory. b. Life insurance proceeds received following her husband's death. c. Earnings on Sandy's Roth IRA credited to her account during the year (but not withdrawn). d. Both a. and c. e. None of the above. Answer: _____ 12. Lori purchased educational savings bonds to help finance 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. b. c. d. e. $0 $833 $1,167 $750 $2,000 Answer: _____ 13. For purposes of the moving expense deduction, self-employed taxpayers can take the deduction if: a. they are employed full-time at the new job location for at least 39 of the first 52 weeks after the move. b. they are employed full-time at the new job location for at least 78 of the first 104 weeks after the move. c. the move is related to the start of a business in a new area. d. Both a. and b. e. All of the above. Answer: _____ 14. Mike and Deb (ages 49 and 53, respectively) file a joint return. Mike's wages of $102,300 are their only source of income in 2015. Mike contributes to his 401(k) plan at work. If Mike contributes $5,500 to his traditional IRA for 2015, what amount can he deduct? a. b. c. d. e. $0 $5,110 $4,320 $5,500 $5,000 Answer: _____ 15. A taxpayer works in a foreign country beginning August 1, 2013 through May 14, 2015. If the taxpayer's foreign earned income in 2015 is $55,440, then the taxpayer's foreign earned income exclusion for 2015 is: a. b. c. d. e. $0. $37,006. $55,440. $63,794. $100,800. Answer: _____ 16. A taxpayer works in a foreign country beginning April 1, 2015 through May 15, 2016. If the taxpayer's foreign earned income for 2015 is $77,900, his foreign earned income exclusion for 2015 is: a. b. c. d. e. $100,800. $77,900. $75,945. $24,855. $0. Answer: _____ 17. A corporation provides its employees with health insurance coverage. The premiums for each employee are $10,000 a year. Which of the following statements is correct if the corporation's plan discriminates in favor of its highly paid employees? a. The highly paid employees will be taxed on the $10,000 of fringe benefits they receive, but the non-highly paid employees will not be taxed on the $10,000. b. All employees will be taxed on the $10,000 of fringe benefits they receive. c. The non-highly paid employees will be taxed on the $10,000 of fringe benefits they receive, but the highly paid employees will not be taxed on the $10,000. d. None of the employees will be taxed on the $10,000 of fringe benefits they receive. e. The corporation cannot provide health insurance coverage if its plan discriminates in favor of highly paid employees. Answer: _____ 18. A company offers its employee, Vince (age 49), $75,000 of group term life insurance coverage. The annual premium paid is $125. The company pays the entire premium. According to the Uniform Premium Table, the monthly amount for each $1,000 of excess coverage for someone 49 years old is $.15. If Vince is not a key-employee, the taxable amount of this fringe benefit is: a. b. c. d. e. $0. $135. $125. $45. $90. Answer: _____ 19. A company offers its employee, Tyler (age 49), $75,000 of group term life insurance coverage. The annual premium paid is $150. The company pays the entire premium. According to the Uniform Premium Table, the monthly amount for each $1,000 of excess coverage for someone 49 years old is $.15. If Tyler is a key-employee of the company whose plan discriminates in favor of its key employees, the taxable amount of this fringe benefit is: a. b. c. d. e. $0. $135. $150. $45. $90. Answer: _____ 20. A company offers its employee, Randy (age 56), $75,000 of group term life insurance coverage. The annual premium paid is $300. The company pays the entire premium. According to the Uniform Premium Table, the monthly amount for each $1,000 of excess coverage for someone 56 years old is $.43 If Randy is a key-employee of the company whose plan discriminates in favor of its key employees, the taxable amount of this fringe benefit is: a. b. c. d. e. $0. $387. $300. $129. $100. Answer: _____ 21. Itemized deductions reported on Schedule A may include all of the following except: a. Interest paid on the mortgage for their vacation home. b. Interest paid on a loan where the proceeds were used to buy stock in a corporation. c. Use of one's personal car to go to the doctor. d. Interest paid on an $80,000 home equity loan where the proceeds were used to buy an SUV. e. All of the above are itemized deductions reported on Schedule A. Answer: _____ 22. Nondeductible taxes include all of the following except: a. b. c. d. e. social security taxes. federal gift taxes. real estate taxes paid on behalf of the taxpayer's son. gasoline taxes. all of the above are nondeductible taxes. Answer: _____ 23. A loss of a taxpayer's property that is not deductible as a casualty and theft loss includes: a. b. c. d. e. property that has been misplaced or lost. damage to residence caused by a hurricane. loss resulting from theft of the taxpayer's automobile. loss from thefts not covered by insurance. all of the above are deductible casualty losses. Answer: _____ 24. Expenses not allowed as deductible medical expenses include: a. tuition paid by the parents of a disabled child to send their child to a special school. b. the cost of braces. c. premiums on life insurance. d. cost of a wheelchair. e. all of the above are deductible medical expenses. Answer: _____ 25. Kate itemizes in 2014. Included in her itemized deductions is $2,900 for state income taxes. Her other itemized deductions total $3,650. Kate's standard deduction amount in 2014 would have been $6,200. In 2015, Kate receives a refund from the state for $500. Which of the following best describes how Kate should handle the refund on her tax return? a. Kate amends her 2014 tax return and deducts only $2,400 for state income taxes. b. Kate reduces her state income tax deduction in 2015 by $500. c. Kate includes $500 in gross income in 2015. d. Kate includes $350 in gross income in 2015. e. None of the above. Answer: _____