Choose the response that accurately completes the following sentence. To calculate the tax owed when there are capital gain distributions from mutual funds on the tax return, a tax preparer would use the:

a. Qualified Dividends and Capital Gain Tax Worksheet.

b. Schedule D Tax Worksheet.

c. Tax rate schedule.

d. Tax tables.

What is the federal tax treatment of exempt-interest dividends reported on Form 1099-DIV, Dividends and Distributions? Exempt-interest dividends are:

a. Not taxable at the federal level. However, taxpayers are still required to report the income on their tax return.

b. Taxable as ordinary income on the federal return.

c. Not taxable at the federal level and are not reported on the federal tax return.

d. Taxable as long-term capital gains on the federal return.

Latonya owned a house for which she paid $300,000. She added a backyard patio deck at a cost of $5,000, making her adjusted basis $305,000. She later sold the house for $330,000 and paid a $20,000 sales commission. What is Latonya's gain or loss?

a. $5,000 gain.

b. $5,000 loss.

c. $25,000 gain.

d. $30,000 gain

Brewster is single. He purchased 100 shares of BTL stock in 2019. He sold the shares for a net gain of $2,000 in 2021. Brewster's 2021 taxable income is $53,500. His long-term capital gain on the stock sale will be taxed at what rate?

a. 0%

b. 15%

c. 20%

d. 22%

In 2021, using a cryptocurrency platform, Warren Wood sold Bitcoin that he held as a capital asset. How will this sale be reported on Warren's tax return? Warren will check the "Yes" box next to the question on virtual currency on page 1 of Form 1040 and:

a. He will use Form 8949 to figure his capital gain or loss and report it on Schedule D (Form 1040).

b. He will use Schedule C (Form 1040) to report the sale.

c. He will use Schedule E (Form 1040) to report the sale.

d. The gain or loss from the sale of virtual currency is not taxable and is not reported on his tax return.