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1. Mary received the following items during 2015:

Christmas bonus from her employer	$500
Christmas gift from her father	$ 35
Prize won in a radio show contest	$100

What is the total amount of the above items that must be included in Mary's 2015 gross income?

	a.	$0
	b.	$100
	c.	$500
	d.	$600
	e.	$635

2. Arthur, age 19, is a full-time student at Gordon College and is a candidate for a bachelor's degree. During 2015, he received the following amounts:

Tuition scholarship	$2,400
Loan from college financial aid office	$1,000
Cash support from parents	$2,000
Ordinary cash dividend	$ 500
Cash prize awarded in contest	$ 300

What is his adjusted gross income for 2015?

a.	$700
b.	$800
c.	$3,200
d.	$6,200
e.	None of the above

3. Jerry and Sally were divorced under an agreement executed July 1, 2015. The terms of the agreement provide that Jerry will transfer to Sally his interest in a rental house worth $250,000 with a tax basis to Jerry of $80,000. What is the amount of the gain that must be recognized by Jerry on the transfer of the property and what is Sally's tax basis in the property after the transfer, respectively?

a.	$170,000 and $250,000
b.	$0 and $250,000
c.	$170,000 and $170,000
d.	$0 and $80,000
e.	None of the above

4. Roger is required under a 2007 divorce decree to pay $400 of alimony and $200 of child support per month for 12 years. In addition, Roger makes a voluntary payment of $100 per month. How much of the total monthly payment is deductible by Roger?

a.	$400
b.	$200
c.	$0
d.	$600
e.	None of the above

15. Richard, who retired on April 30, 2015, receives a monthly employee annuity benefit of $1,400 payable for life, beginning May 1, 2015. Richard is single. During his years of employment, Richard contributed $29,400 to the company's plan. Richard's age on May 1 is 66. Using the simplified method, how much of the annuity payment amounts received during 2015 ($11,200) may Richard exclude from gross income?

	a.	$427
	b.	$1,120
	c.	$1,680
	d.	$11,200
	e.	None of the above

16. Nicole is a student at USB Law; she receives a $52,000 scholarship for 2015. Of the $52,000, $42,000 is used for tuition, $7,000 is used for books, and $3,000 is used for room and board. How much of the scholarship is taxable income for Nicole in 2015?

a.	$52,000
b.	$3,000
c.	$45,000
d.	$7,000
e.	$12,000

17. Which of the following may result in life insurance proceeds that are taxable to the recipient?

	a.	A life insurance policy transferred to a creditor in payment of a debt
	b.	A life insurance policy in which the insured is the daughter of the taxpayer and the beneficiary is the taxpayer
	c.	A life insurance policy purchased by a taxpayer insuring his or her business partner
	d.	A life insurance policy purchased by a corporation insuring an officer.

18. Acacia Company had inventory of $400,000 on December 31, 2015. Other information is as follows:

Purchases $1,500,000

Sales 1,800,000

Inventory 1/1/2014 500,000

What is the amount of Acacia's cost of goods sold for 2015?

	a.	$200,000
	b.	$1,600,000
	c.	$1,700,000
	d.	$1,800,000

19. Patricia is a business owner who is trying to determine her cost of goods sold for 2015. She bought 20 units of inventory at $11, then 26 units at $9, and finally 18 units at $14. She sold 30 units in 2015 and uses LIFO for her inventory valuation. What was her cost of goods sold in 2015, assuming that there was no inventory at the beginning of the year?

a.	$706
b.	$310
c.	$360
d.	$330
e.	None of the above

20. Greg, a self-employed plumber, commutes from his home to his office which is 10 miles away. He loads his truck for the day with the parts that he needs. Then he is off to see his first customer of the day, Mr. Smith. Mr. Smith is 5 miles away from the office. After Mr. Smith's job, Greg goes to his next job, Martin's Dry Cleaning, which is 16 miles away from Mr. Smith. Greg spends the rest of the day at Martin's Dry Cleaning. From Martin's Dry Cleaning, Greg goes home which is now only 7 miles away. How much can Greg count as deductible transportation miles?

a.	None of it
b.	21 miles
c.	26 miles
d.	43 miles

21. Barry is a self-employed attorney who travels to New York on a business trip during 2015. Barry's expenses were as follows:

Airfare	$560
Taxis	$ 40
Meals	$100
Client Entertainment	$200
Lodging	$350

How much may Barry deduct as travel expenses for the trip?

a.	$0
b.	$950
c.	$1,000
d.	$1,100
e.	None of the above

Value after casualty

$ 17,000

Harris was partially insured for his loss and in 2015 he received a $113,000 insurance settlement. What is Harris' allowable casualty loss deduction for 2015?

	a.	$4,100
	b.	$4,200
	c.	$9,100
	d.	$9,200
	e.	None of the above

45. In 2015, Alex has income from wages of $16,000, adjusted gross income of $18,000, and tax liability of $300 before the earned income credit. What is the amount of Alexs earned income credit for 2015, assuming his 5-year-old dependent son lived with him for the full year?

a.	$0
b.	$3,250
c.	$3,171
d.	$3,274
e.	$3,359

46. Clark, a widower, maintains a household for himself and his two dependent preschool children. For the year ended December 31, 2015, Clark earned a salary of $32,000. He paid $3,500 to a housekeeper to care for his children in his home, and also paid $1,500 to a kiddie play camp for child care. He had no other income or expenses during 2015. How much can Clark claim as a child care credit in 2015?

a.	$360
b.	$1,300
c.	$1,200
d.	$1,440
e.	None of the above

47. Hal is enrolled for one class at a local community college; tuition cost him $300. Hals AGI is $20,000. Hal can take a lifetime learning credit of:

a.	$0
b.	$50
c.	$100
d.	$150
e.	$60

48. The American Opportunity credit

a.	Is 50 percent of the first $1,200 of tuition and fees paid and 100 percent of the next $1,200.
b.	Is available for 2 years of post-secondary education.
c.	Is fully refundable even if the credit exceeds the tax liability.
d.	Is available for qualifying expenses paid on behalf of the taxpayer and his or her spouse, in addition to those paid for dependents.

49. Jim has foreign income. He earns $25,000 from Country A which taxes the income at a 20 percent rate. He also has income from Country B of $15,000. Country B taxes the $15,000 at a 10 percent rate. His U.S. taxable income is $90,000, which includes the foreign income. His U.S. income tax on all sources of income before credits is $13,000. What is his foreign tax credit?

a.	$6,500
b.	$5,778
c.	$5,846
d.	$12,346
e.	Jim does not qualify for a foreign tax credit.

50. Taxpayers are allowed two tax breaks for adoption expenses. They are allowed:

Qualified Expenses
Paid personally	Paid by employer

a.	Credit Credit
b.	Exclusion Credit
c.	Exclusion Exclusion
d.	Credit Exclusion