Question 2 of 75.

Maxine's only income for 2021 consisted of $54,000 in wages and $1,800 in interest income. She is 50 years old and will use the single filing status. She is covered by an employer-sponsored retirement plan but would like to contribute to a traditional IRA if it will lower her tax liability. Assuming she has no other adjustments to income, what is the maximum, fully deductible amount she can contribute to a traditional IRA for 2021? A) $0; B) $6,000; C) $6,500; D) $7,000

Question 3 of 75.

Seiji converted his personal residence to rental property in 2021. He purchased the property in 2016 for $106,000, of which $16,000 was allocable to the land. There were no adjustments to his original basis during the period of time the property served as his primary residence, but on the date of conversion, an appraisal valued the property at $170,000; $20,500 was allocated to the land. Seiji's basis for depreciation is: A) $90,000; B) $106,000; C) $149,500; D) $170,000

Question 4 of 75.

Gladys (85) passed away on March 29, 2021. Miranda (32), her only grandchild, is the designated beneficiary of Gladys' traditional IRA. Miranda is not chronically ill or disabled. Under a provision of the Setting Every Community Up for Retirement Enhancement (SECURE) Act, Miranda must withdraw the entire balance from the inherited IRA: A) Within one year after the year of Gladys' death. B) Within five years after the year of Gladys' death. C) Within ten years after the year of Gladys' death. D) Over Katie's lifetime, after the year of Gladys' death.

Question 5 of 75.

Jared and Lima began and finalized the adoption of a U.S. child with special needs in 2021. Their total adoption expenses were $3,613. Their modified adjusted gross income was $203,000. What is the maximum amount they may claim for the adoption credit? A) $0; B) $3,613, C) $7,220, D) $14,440

Question 6 of 75.

A self-employed taxpayer may claim a business deduction for which of the following unreimbursed expenses? A) Items purchased for resale in their trade or business that were not sold by the end of the year. B) An office in their home, used regularly and primarily for business. The taxpayer's family members occasionally use the space for recreation. C) Service fees paid to an online marketplace that the taxpayer used to sell items previously purchased for their personal use. They were able to sell the items for half their original cost. D) Software used to keep track of miles driven while performing tasks for a client.

Question 7 of 75.

Johanna, age 58, takes a $12,000 distribution from her traditional IRA. She uses the distribution to pay qualified education expenses for her nondependent grandson, who is attending a state university. How much of Johanna's distribution is subject to the 10% additional tax? A) $0; B) $2,000; C) $10,000; D) $12,000

Question 8 of 75.

Emmanuel exercised a nonstatutory stock option on March 14, 2021. He purchased 200 shares of his company's stock for $6,000. The fair market value of the stock at the time of purchase was $8,000. He included the $2,000 difference between the fair market value and the purchase price as compensation income when he filed his 2021 return. What is Emmanuel's basis in the underlying stock? A) $0; B) $2,000; C) $6,000, D) $8,000