Mark for follow up Question 29 of 75. Which of the following statements regarding a sole proprietorship is TRUE. A sole proprietorship Owner will be personally liable for debts of the business. Must register with the state. Must keep documents governing operations. Is required to legally dissolve as set out in the organizational documents. Question 26 of 75. caxpayer's pension or annuity includes contributions that were previously included in gross income, the taxpayer may generally do all of the fol EXCEPT Use the general rule to compute the tax-free part of their payments if they began receiving payments after November 18, 1996. Exclude the amount of the distribution that is considered a return of basis Assume that the tax-free part of the payment will remain the same each year, even if the amount of the payment changes. Use the simplified method to compute the tax-free part of their payments if they began receiving payments after November 18, 1996. 0 000 Mark for follow up Question 36 of 75. PIC.COLLAGE 0 000 Which of the following statements accurately describes the accrual method of accounting? Businesses that have inventory generally must not use the accrual method to account for the inventory, unless they are a small business taxpayer. Only income and expenses actually or constructively received or paid during the year are reported Income is recorded as sales revenue when the sale is made, even if payment has not been received for goods or services that have been sold. Transactions are only recorded when cash is actually transferred or received. Mark for follow up Question 60 of 75. What happens to credits in the net operating loss (NOL) carryover year? Credits that are dependent on AGI, MAGI, or tax liability must be recomputed. Credits that are dependent on AGI, MAGI, or tax liability do not need to be recomputed. All credits must be recomputed. No adjustment is needed. Mark for follow up Question 69 of 75. Listed property includes all the following EXCEPT: O Computers and related peripheral equipment placed in service prior to 2018. Passenger automobiles weighing 6,000 pounds or less. O Property used for entertainment, recreation or amusement O Qualified nonpersonal use vehicles. folloin Question 58 of 75. PIC.COLLAGE Which of the following sources of rental income will be considered passive? A bed and breakfast where the taxpayer provides personal care items, daily cleaning services, and breakfast A single-family home where the taxpayer makes management decisions regarding tenants and expenses. A single-family home where the taxpayer purchased and renovated the property with the intention of making a quick profit. O A vehicle where the taxpayers provides no personal services and does not participate in the activity. Mark for follow up