Question 11 Renee claimed her own child in 2020, age 10, and her nephew, age 11 (who moved back with his parents at the beginning of 2021). She then claimed her only child as a dependent on her 2021 return. Her AGI is $49,000, and her tax liability is $3,139. She received $2,800 from the Recovery Rebate Credit. She also received Form 6419 showing $3,500 in advance for two children (Box 2) for the Child Tax Credit. Since she received $500 over the correct amount of the Child Tax Credit in 2021, what is the correct course of action for Renee in this years return? a) She does not have to return the $500 overpayment. b) She must return the $500 overpayment to the IRS. c) She must defer the excess Child Tax Credit to the following year. d) None of the above are correct.

Question 12 When your client files the 2021 tax return during the 2022 tax filing season, you will need to compare or reconcile the following activities, except for: a) Payments received for the Child Tax Credit. b) Economic Impact Payment (EIP-3). c) Earned Income Tax Credit (in advance). d) None of the above.

Question 13 Before the TCJA tax law, a C-Corporation was an expensive way to structure a business. C-Corporations provide protection and allow great flexibility and planning but double taxation hammered small business owners and often limited growth. Considering the new tax law signed by the President on December 22, 2017, what is the flat tax rate that a C-Corporation uses to calculate and pay taxes starting with the 2018 tax year (and before 2025)? a) 20% b) 21% c) 22% d) 39.6%

Question 14 Richard just turned 45 years old. He wants to rollover his current 401(K) plan into a traditional IRA or Roth IRA. Nevertheless, he is not sure about the tax consequences and implications of the rollover. Which one of the following statements is correct? a) A rollover into any IRA is not allowed more than once a year. b) A rollover from a retirement plan to any IRA is always a tax-free transfer. c) In order to be tax-free, a rollover into a traditional IRA must be between a trustee and another trustee. d) Richard may make a tax-free rollover within 60 days of the distribution from his retirement account, if the rollover is made into a traditional IRA. Question 15 Mae Lyn is eligible to claim 10-year-old Annie as a dependent, but Mae Lyn does not have any taxable income during 2021. Under the latest tax reform changes regarding the Child Tax Credit, how much credit can Mae Lyn claim for Annie on her 2021 tax return? a) $ 0 b) $3,000 c) $3,600 d) $2,000

Question 16 Susan purchased her house seven years ago. She had not been able to remodel it, instead she decided to sell it for $525,000. The profit on the sale of the house was $265,000. What amount can Susan exclude from the gain in order to avoid paying capital gains tax? a) $265,000 b) $525,000 c) $250,000 d) $ 15,000