Flag question: Question 178

Question 1781 pts

California Labor Code Section 226.8 and Labor Code Section 2753 applies which of the following penalties to a paid tax preparer who knowingly advises his/her client to misclassify the client's workers as independent contractors?

Group of answer choices

A. A minimum fine of $5,000 per misclassified employee.

B. Joint and Several liability with the client

C. Criminal liability if found guilty of payroll tax evasion

All of A. B. and C.

Flag question: Question 179

Question 1791 pts

Gracie worked as a teacher, in a full time status, in an elementary school in 2021. She paid $500 for books, supplies, and computer equipment that she used in the classroom, and was not reimbursed for these expenses. Which of the following is true?

Group of answer choices

She can take a miscellaneous itemized deduction for $500

She can take a miscellanous itemized deduction of $250

She can take a deduction of $500 to arrive at her Adjusted Gross Income.

She can take a deduction of $250 to arrive at her Adjusted Gross Income.

Flag question: Question 180

Question 1801 pts

John is a member of the U.S. Army Reserves. In 2021, he travels 2,000 miles round trip to travel to his U.S. Army Reserve base for the entire year. In 2021, he incurred $3,000 of unreimbursed expenses associated with his travel to his U.S. Army Reserve Base. Which of the following is true?

Group of answer choices

He can take a deduction of $3,000 to arrive at his Adjusted Gross Income.

He can take a deduction of $3,000 as a miscellaneous itemized deduction.

He can take a deduction of $1,160 to arrive at his Adjusted Gross Income.

He can take a miscellaneous itemized deduction of $1,160

Flag question: Question 181

Question 1811 pts

Jenny is a member of the U.S. Air Force. In 2021, she was on active duty in the U.S. Air Force, and moved duty stations pursuant to U.S. Air Force orders. She incurred $750 of moving expenses that were not reimbursed. Which of the following is true?

Group of answer choices

She can deduct $750 to arrive at her Adjusted Gross Income.

She can deduct $0 from her moving expenses.

She can deduct $375 to arrive at her Adjusted Gross Income.

She can deduct $375 as a miscellaneous itemized deduction subject to the 2% Adjusted Gross Income Limit.

Flag question: Question 182

Question 1821 pts

In 2021, Alex had paid $5,000 in qualified tuition and fees. His filing status is Single, and his Adjusted Gross Income is $50,000. How much of a qualified tuition and fees deduction can he take in 2021?

Group of answer choices

$0

$4,000

$5,000

$2,500

Flag question: Question 183

Question 1831 pts

Giovanelli is a self-employed carpenter, and he works out of his home office. In 2021, Giovanelli's home office qualifies for the home office deduction. Giovanelli elects to take the simplified method for the home office deduction. Giovanelli's home office is 250 square feet big, and takes the maximum deduction allowed by the simplified method. In 2021, how much of a deduction can Giovanelli take?

Group of answer choices

$0

$250

$1,250

$1,500

Flag question: Question 184

Question 1841 pts

Terrel is a self-employed construction business owner. He has 5 employees. He offers his employees medical insurance, and he paid $50,000 toward the premium of the medical insurance for his employees. His employees had $10,000 withheld from their wages to pay for the employees' share of the medical insurance premium. Which of the following is true, regarding the expense for medical insurance that he offers his employees?

Group of answer choices

Terrel can take a $60,000 deduction on Schedule 1 to arrive at his Adjusted Gross Income.

Terrel can take a $50,000 deduction on Schedule 1 to arrive at his Adjusted Gross Income.

Terrel can take a $60,000 deduction on his Schedule C.

Terrel can take a $50,000 deduction on his Schedule C.

Flag question: Question 185

Question 1851 pts

In 2020, Peter earned a $10,000 bonus from his work, and the $10,000 was included in Peter's taxable income in 2020. In 2021, Peter's employer determined that Peter's bonus was computed incorrectly, and Peter was required to refund $10,000 to his employer. Under the Claim of Right doctrine, which of the following is true?

Group of answer choices

In 2021, Peter must include another $10,000 in his taxable income.

In 2021, Peter is allowed to take a $10,000 miscellaneous itemized deduction.

In 2021, Peter is not allowed to take a $10,000 miscellaneous itemized deduction.

In 2021, Peter is allowed to take a $10,000 to arrive at his Adjusted Gross Income.

Flag question: Question 186

Question 1861 pts

In 2020, Paul incurred $20,000 of medical expenses, and recognized a medical expense deduction of $10,000 as a miscellaneous itemized deduction on Schedule A. In 2021, Paul received $20,000 in reimbursement for the medical expenses he incurred in 2020. Which of the following is true?

Group of answer choices

In 2021, Paul must increase his taxable income by $20,000.

In 2021, Paul does not recognize any increase to his taxable income.

In 2021, Paul must increase his taxable income by $10,000.

In 2021, Paul can take another $10,000 miscellaneous itemized deduction for medical expenses on Schedule A.

Flag question: Question 187

Question 1871 pts

Elaine is a self-employed Certified Public Accountant. She paid $5,000 for the medical insurance premium on a policy for her and her dependents. Where on the Federal Tax Forms can she deduct the $5,000 medical insurance premium expense?

Group of answer choices

As an itemized deduction for medical expenses on Schedule A

As a medical expense on Schedule C

As a deduction to arrive at Adjusted Gross Income on Schedule 1.

Elain cannot take a deduction for this expense.

Flag question: Question 188

Question 1881 pts

In 2021, Ansar made payments on his qualified student loan. He repaid $5,000 toward the principle, and $1,000 for interest on his student loan. In 2021, his Modified Adjusted Gross Income was $50,000. How much of a deduction can Ansar take for qualified student loan interest in 2021?

Group of answer choices

$1,000

$0

$6,000

$5,000

Flag question: Question 189

Question 1891 pts

In 2020, Donnie made a $500 cash donation to a qualified charity. He filed as Single, and took the standard deduction. Which of the following is true in regards to the $500 donation made by Donnie in 2020?

Group of answer choices

He cannot take a deduction for the $500 donation because he took the standard deduction.

He can take a $500 deduction to arrive at his Adjusted Gross Income.

He can take a $300 deduction to arrive at his Adjusted Gross Income.

He can increase his standard deduction by $500.

Flag question: Question 190

Question 1901 pts

In 2021, Terri paid $12,000 in state income tax, and $5,000 in real estate taxes. In 2021, Terri filed as Single. In 2021, Terri itemizes deductions, and Terri's deduction for state and local taxes is limited to which of the following?

Group of answer choices

$10,000

$17,000

$0

$15,000

Flag question: Question 191

Question 1911 pts

Kate bought her primary residence on 1/1/2015. She borrowed $800,000 from a bank, and applied all $800,000 from the loan to the purchase of her primary residence on 1/1/2015. In 2021, Kate made $14,000 in mortgage payments towards the loan. $12,000 was to repay principle, and $2,000 was for interest charges on the loan. How much of an miscellaneous itemized deduction for interest can Kate take in 2021?

Group of answer choices

$2,000

$0

$14,000

$1,875

Flag question: Question 192

Question 1921 pts

On 6/1/2021, Julian took out a $100,000 cash-out refinance mortgage loan on his primary residence. He used the $100,000 to go over a vacation and buy an automobile. In 2021, he repaid $5,000 toward the principle on the $100,000 cash-out refinance mortgage loan, and paid $750 in interest toward that same loan. In 2021, how much of a miscellaneous itemized deduction can Julian take for the payments to the cash-out refinance mortgage loan that he obtained on 6/1/2021?

Group of answer choices

$5,000

$5,750

$0

$750

Flag question: Question 193

Question 1931 pts

On 1/1/2021, Andrea owned her primary residence, and had a $750,000 mortgage on her residence. On 7/31/2021, she took out an additional $100,000 home equity loan. Andrea used the proceeds of the loan to remodel her house. In 2021, Andrea repaid back $5,000 toward the principle of the home equity loan that she obtained on 7/31/2021, and paid $1,000 in interest toward the same loan. In 2021, how much of a miscellaneous itemized deduction can Andrea take for the payments to the home equity loan that she obtained on 7/31/2021?

Group of answer choices

$1,000

$0

$6,000

$500

Flag question: Question 194

Question 1941 pts

Sherrissa has a $500,000 mortgage secured by a qualified residence. The interest on that mortgage qualified as a miscellaneous itemized deduction. Sherrissa can elect to treat that mortgage as not secured by a qualified residence, resulting in the interest on that mortgage not qualifying as a miscellaneous itemized deduction. Which of the following gives the best reason for why Sherrisa might make that election?

Group of answer choices

Sherrissa will be not be itemizing deductions, but instead take the standard deduction.

Sherrissa will be selling her primary residence in the current year, and will pay less capital gain.

Sherrissa's residence is in the process of foreclosure, and Sherrissa will incur less forgiveness of debt income.

The interest on that mortgage loan may be deductible under a different Internal Revenue code section.

Flag question: Question 195

Question 1951 pts

On 1/1/2020, Sophea borrowed $100,000. Out of the $100,000, she used $60,000 to buy equipment for her Real Estate business, and used $40,000 to buy a car that was used 100% for personal purposes. In 2021, she paid $4,000 of interest on the $60,000 that was used to buy equipment for her Real Estate Business, and paid $3,000 of interest on the $40,000 that was used to buy a car that was used 100% for personal purposes. Which of the following is true in regards to the deductibility of interest on Sophea's 2021 Income Tax Return?

Group of answer choices

Sophea can deduct $7,000 as a miscellaneous itemized deduction on Schedule A

Sophea can deduct $4,000 as a business expense for interest on Schedule C.

Sophea can deduct $4,000 as a business expense for interest on Schedule C, and $3,000 as a miscellaneous itemized deduction on Schedule A.

Sophea can deduct $3,000 as a miscellaneous itemized deduction on Schedule A.

Flag question: Question 196

Question 1961 pts

Steve purchase a fundraising dinner for $100 from a qualified charity. The fair market value of the dinner was $20. Steve attended the fundraising dinner and ate the provided meal. How much of an itemized deduction for a charitable contribution can Steve recognize?

Group of answer choices

$20

$100

$0

$80

Flag question: Question 197

Question 1971 pts

In 2021, Steve's Adjusted Gross Income is $50,000. He gave $75,000 in cash as a contribution to a qualified charity in 2021. In 2021, how much of a miscellaneous itemized deduction for charitable contribution can Steve take for the $75,000 cash contribution he made to a qualified charity?

Group of answer choices

$50,000

$75,000

$30,000

$0

Flag question: Question 198

Question 1981 pts

Arnold gave used clothes as a charitable contribution to a qualified charity. He bought the clothes over a year ago for $500. The fair market value of the clothes at the time of donation was $100. How much of a miscellaneous itemized deduction for charitable contributions is Arnold allowed to take?

Group of answer choices

$500

$100

$0

$400

Flag question: Question 199

Question 1991 pts

Don gave his 10 year old car to a qualified charity. Don bought the car for $15,000. The qualified charity sold the car at an auction, and received $500 cash. How much of a miscellaneous itemized deduction for charitable contributions can Don claim for the donated car on his Federal Income Tax Return?

Group of answer choices

$15,000

$500

$0

$9,500

Flag question: Question 200

Question 2001 pts

Richard gave a painting to Save the Whales foundation. Save the Whales foundation is a qualified charity. Richard bought the painting in 1990 for $10,000. He gave the painting to Save the Whales foundation on 6/1/2021. On 6/1/2021, the painting was worth $100,000. On 6/10/2021, Save the Whales foundation sold the painting for $100,000. Richard's Adjusted Gross Income was $500,000 in 2021. How much of a miscellaneous itemized deduction can Richard recognize for his charitable contribution of a painting in 2021?

Group of answer choices

$100,000

$10,000