Question 54 of 70.

Karim and Rashida Sultan are filing a joint federal return. They have the following investment income: Wells Fargo Bank CD, $720 Series HH bond interest, $521 Port of San Francisco, California, bond interest, $375 City of Bend, Oregon, bond interest, $64 Oak Farms dividends, $826 Craft Inc. dividends, $597 Frankfort Mutual Fund dividends, $283 Credit Union dividends, $232 Blake Harrison, private contract interest, $1,263 What is the amount of total taxable dividends reported on Schedule B?

$1,455

$1,655

$1,706

$4,881

Mark for follow up

Question 55 of 70.

Which of the following items is NOT considered when determining the cost of maintenance of a home for the head of household filing status?

Utilities.

Insurance on the home.

Food consumed in the home.

Mortgage principal payment.

Mark for follow up

Question 56 of 70.

Which of these is correct regarding a spousal IRA?

A spouse may be eligible to contribute to an IRA even if they have no income of their own.

A spousal IRA is allowed for any filing status.

The limitation on the amount that can be contributed to a spousal IRA is always the same as that of the working spouse.

The taxpayer's income is not taken into consideration when establishing a spousal IRA.

Mark for follow up

Question 57 of 70.

Which of the following taxpayers should use Form 5329 to report an exception to the early distribution penalty in 2020? All taxpayers are under age 59, and in all cases, the taxpayer received a Form 1099-R with code 1 in box 7.

Trina received a distribution from her 401(k) which she used to purchase her first home.

Ronnie received a retirement plan distribution due to an accident that left him totally and permanently disabled.

Steven received a retirement plan distribution for unreimbursed medical expenses during the year that exceeded 5% of his adjusted gross income (AGI) for the year.

Rosa, who worked as a lab technician, turned age 50 during the tax year and received a retirement plan distribution after separating from service.

Mark for follow up

Question 58 of 70.

Yoshi's divorce was final on July 3, 2019. Yoshi's 24-year-old daughter (a full-time student and nondependent) lives with her. What is Yoshi's correct filing status?

Single.

Married filing jointly.

Married filing separately.

Head of household.

Mark for follow up

Question 59 of 70.

Assuming they meet all other requirements, which of these taxpayers could claim the American Opportunity Tax Credit?

Maria is claimed by her parents, but would like to claim her own education credit.

Olaf would like to claim the AOTC for his son, who is attending a private secondary school.

Julia is a full-time student working toward her MA and would like to claim the AOTC.

Kasper would like to claim the AOTC for his son, who is a sophomore at a state university.

Mark for follow up

Question 60 of 70.

In order to qualify for the federal Child Tax Credit, a qualifying child must be under the age of:

13

17

18

21

Mark for follow up

Question 61 of 70.

What is the most an employee would pay in social security tax in 2020?

$2,134.35

$4,268.70

$8,537.40

$17,074.80

Mark for follow up

Question 62 of 70.

Melody, age 66, files single. In 2020, she earned $21,000 in wages and $1,500 in taxable interest income. She received $11,500 in social security benefits. Choose the response that best completes this sentence: Up to ___ of her social security benefits may be taxable.

0%

50%

85%

100%

Mark for follow up

Question 63 of 70.

Which of these is NOT reported on Form 1099-DIV?

Nondividend distributions.

Capital gain distributions.

Credit union dividends.

Qualified dividends.

Mark for follow up

Question 64 of 70.

The following taxpayers are covered by an employer-sponsored retirement plan. Which one may FULLY DEDUCT their traditional IRA contribution in 2020?

Joshua files single. His modified AGI is $65,050.

Delia files head of household. Her modified AGI is $68,000.

Samuel is married and lived with his spouse all year. He chooses to file a separate return. His modified AGI is $9,975.

Sonia is married and files a joint return. The couple's modified AGI is $99,500.

Mark for follow up

Question 65 of 70.

Education assistance from an employer:

Qualifies for the American Opportunity Tax Credit, but not the lifetime learning credit.

Can only be used for the lifetime learning credit.

Can be used for any education credit.

Is tax-free and cannot be used for any credit or deduction.

Mark for follow up

Question 66 of 70.

Which of these is incorrect regarding a Roth IRA conversion?

The taxpayer can receive a distribution from their traditional IRA and personally contribute the money into their Roth IRA within 60 days of the distribution.

The taxpayer is not required to pay income tax on the transferred amounts in the year of conversion. Income tax will be paid when the taxpayer receives distributions from the converted funds.

The taxpayer can request the traditional IRA trustee to transfer the funds directly into their Roth IRA.

The taxpayer can reclassify their traditional IRA account as a Roth IRA, if the account is maintained by the same trustee.

Mark for follow up

Question 67 of 70.

Harry (65) retired this year and began taking distributions from his 401(k). Contributions to his 401(k) were made over the course of his career through a combination of before-tax contributions, after-tax contributions, and employer matching. How should Harry determine the taxable amount of his distribution?

All of Harry's distributions will be taxable because a 401(k) is a qualified plan.

Harry should use the Simplified Method to determine how much of his distribution is attributable to return of cost basis.

Harry should use the General Rule to determine how much of his distribution is attributable to cost basis.

Distributions from a 401(k) plan are always tax-free.

Mark for follow up

Question 68 of 70.

Which of these certificates qualifies for the mortgage interest credit?

Federal Housing Administration Certificate.

Farmers Home Administration Certificate.

Homestead Staff Exemption Certificate.

Mortgage Credit Certificate.

Mark for follow up

Question 69 of 70.

The lifetime learning credit has a maximum credit of:

$2,000 per return.

$2,500 per return.

$4,000 per return.

$10,000 per return.

Mark for follow up

Question 70 of 70.

There are many rules to comply with when claiming a qualifying child. Which of the following is NOT one of them?

The dependent is not filing a joint return with a spouse unless that joint return is only a claim for refund and there would be no tax liability for either spouse on separate returns.

The dependent must be a U.S. Citizen, U.S. resident alien, U.S. national, or a resident of Canada or Mexico.

The dependent must live with the taxpayer all year and have no income.

The taxpayer cannot claim any dependents if they could be claimed as a dependent by another taxpayer.

Mark for follow up