QUESTION 2

BJT Corporation is owned 40 percent by Bill, 35 percent by Jack, and 25 percent by Teresa. Bill and Jack are father and son. What is Jack's total direct and indirect ownership under Section 267?

	A.	75 percent
	B.	65 percent
	C.	None of the above
	D.	40 percent
	E.	35 percent

5 points

QUESTION 3

E Corporation is a sub chapter S corporation owned by three individuals with calendar year-ends. The corporation sells a sports drink as its principal product and has similar sales each month. What ooptions does E Corporation have in choosing a tax year?

	A.	Because the owners of E Corporation have tax years ending in December, E Corporation must also choose a December year-end.
	B.	E Corporation may choose any month end as its tax year.
	C.	E Corporation may choose a tax year ending in September, October, or November, but only if the corporation also makes an annual cash deposit and adjusts the amount every year depending on the income deffered.
	D.	E Corporation may choose an October, November, or December tax year-end.

5 points

QUESTION 4

Employers must file a quarterly tax return showing the amount of wages paid and the amount of income tax and FICA tax withholding due. This tax return is filed on:

	A.	Schedule SE
	B.	Form 941
	C.	Schedule H
	D.	Form 944 or Form 945

5 points

QUESTION 5

Income and loss from which of the following entities is passed through and taxed on the individual's personal tax returns?

	A.	Partnership
	B.	S corporation
	C.	Each of the above
	D.	Neither of the above

5 points

QUESTION 6

Pekoe sold stock to Rose for $13,000, its fair market value. The stock cost Pekoe $16,000 5 years ago. Also, Pekoe sold Earl (an unrelated party) stock for $6,500 that cost $7,500 3 years ago. Rose and Pekoe are brother and sister. What is Pekoe's recognized loss?

	A.	$6,500
	B.	$4,000
	C.	$1,000
	D.	$3,000
	E.	$0

5 points

QUESTION 7

The FUTA is:

	A.	An unemployment tax with a rate of 2.9 percent up to $117,000 of salary per employee.
	B.	A disability tax with a rate of 2.9 percent up to $7,000 of salary per employee.
	C.	A disability tax with a rate of 0.6 percent p to $117,000 of salary per employee.
	D.	An unemployment tax with a rate as low as 0.6 percent up to $7,000 of salary per employee.

5 points

QUESTION 8

The amortization period for Section 197 intangibles is:

	A.	10 years
	B.	15 years
	C.	40 years
	D.	5 years
	E.	7 years

5 points

QUESTION 9

Which of the following amounts paid by an employer to an employee is not subject to withholding?

	A.	All of the above are subject withholding
	B.	Commissions
	C.	Salary
	D.	Bonus
	E.	Reimbursement of expenses under an accountable plan

5 points

QUESTION 10

Which of the following entities is required to report on the accrual basis?

	A.	All of the above corporations must report on the accrual basis.
	B.	A corporation engaged in tropical fruit farming in Southern California.
	C.	A manufacturing business with $15 million of gross receipts operating as a regular C corporation.
	D.	An accounting firm operating as a Personal Service Corporation.

5 points

QUESTION 11

Which of the following forms would a lottery winner receive for her winnings?

	A.	Form 1099-DIV
	B.	Form W-4
	C.	Form W-2G
	D.	Form 1099-R
	E.	Form 1099-MISC

5 points

QUESTION 12

Which of the following is an acceptable method of accounting under the tax law?

	A.	the accrual method
	B.	The hybrid method
	C.	The cash method
	D.	All of the above are acceptable
	E.	None of the above

5 points

QUESTION 13

Which of the following is not considered listed property for purposes of determining the taxpayer's depreciation deduction?

	A.	A computer used by a bank executive, on the bank premises, in performing services as an employee
	B.	None of the above
	C.	A computer used by a taxpayer 40 percent in managing her investment portfolio and 20 percent in her business as an accountant
	D.	A computer used exclusively by the taxpayer in managing his investment portfolio
	E.	An automobile used 40 percent by an employee in providing services to his employer

5 points

QUESTION 14

Which of the following is not subject to self-employment tax?

	A.	Net earnings of the owner of a shoe store
	B.	Net earnings of the owner of a dry cleaner
	C.	Distributive share of earnings of a partnership
	D.	Net earnings of self-employed lawyer
	E.	Gain on the sale of real estate held for investment

5 points

QUESTION 15

Which of the following is not true about the MACRS depreciation system:

	A.	Commercial real estate buildings are depreciated over 39 years straight-line.
	B.	A salvage value must be determined before depreciation percentages are applied to depreciable real estate.
	C.	No matter when during the month depreciable real estate is purchased, it is considered to have been purchased at mid-month for MACRS depreciation purposes.
	D.	Residential rental buildings are depreciated over 27.5 years straight-line.

5 points

QUESTION 16

Which of the following statements with respect to the depreciation of property under MACRS in incorrect?

	A.	The cost of property to which the MACRS rate is applied is not reduced for estimated salvage value.
	B.	In some cases, when a taxpayer places a significant amount of property in service during the las quarter of the year, real property must be depreciated using a mid-quarter convention.
	C.	Real property acquired after 1986 must be depreciated using the straight-line method.
	D.	If a taxpayer elects to use the straight-line method of depreciation for property in the 5-year class, all other 5 year class property acquired during the year must also be depreciated using the straight-line method.
	E.	Under the half-year convention, one-half year of depreciation is allowed in the year the property is placed in service.