QUESTION 19

1. Jack and Jessie have been married for a couple of years, and they have asked you for some advice. They have just adopted a child this year, and they are moving from their smaller home to a larger home as a result. However, they love their first home and dont want to part with it, so they are considering renting it out.

   What kind of activity would this fall under?

   	a.	Partnership requiring a Form 1065
   	b.	Production of Income
   	c.	Family Trust
   	d.	Trade or Business

5 points

QUESTION 20

1. Zach is currently in high school and will turn 18 as of December 26. He lives with his father, who provides all of his support after his divorce from Zachs mother. Under what status will Zach be qualified/not qualified as his dependent?

   	a.	Qualifying Student
   	b.	Qualifying Relative
   	c.	Not qualifying, because his father is not married
   	d.	Qualifying Child

5 points

QUESTION 21

1. Jack and Katie are taking care of Katies mother Andrea, who is currently making about $29,000 per year on Social Security and receives no income from other sources, except under $1500 from bank interest and stock dividends. Under what status will Andrea be qualified/not qualified as their dependent?

   	a.	Qualifying Child
   	b.	Not qualifying, because she makes too much money.
   	c.	Qualifying Relative
   	d.	Qualifying Parent

5 points

QUESTION 22

1. Anna is no longer qualified to be a dependent under the Code under her parents she used to live with during college. She is 22 years old. Anna started a MAcc program and lives on scholarships, including a stipend, where she earns $10,000/year as a graduate assistant. She gets a W-2, and her stipend is taxed as wages. Could she qualify for the Earned Income Credit? Why/why not?

   	a.	No, she is earning money as a stipend and not work outside of the university.
   	b.	Yes, she has earned income as defined under the law and is not subject to any other limitation based on her circumstances as listed above.
   	c.	No, she needs to have a child to qualify for the earned income credit.
   	d.	No, she is not married, nor does she have kids, and she does not meet the age test.

5 points

QUESTION 23

1. Karen is currently attending school at George Mason in the accounting program (obviously highly intelligent). Her parents live in North Carolina, and she has not been home in two years because she is working hard to find a good internship for success. She has not graduated school yet. Under what status will Karen be qualified/not qualified as their dependent?

   	a.	Qualifying Relative
   	b.	Qualifying Student
   	c.	Not qualifying, because she has lived away from the home for more than six months.
   	d.	Qualifying Child

5 points

QUESTION 24

1. Which of the following is not a deduction below the line (Adjusted Gross Income)?

   	a.	Traditional IRA contribution
   	b.	Interest paid on investments made in the stock market
   	c.	Foreign Taxes Paid During the Year
   	d.	Medical Expense

5 points

QUESTION 25

1. What is the limit for state and local taxes deductible in 2020 (assume the person is single)?

   	a.	8,000
   	b.	5,000
   	c.	10,000
   	d.	20,000