Which of these will increase the basis of property?

1. Depreciation.
2. Casualty deduction.
3. Tax credit.
4. Capital improvement

Which of these would NOT be acceptable for travel expenses substantiation?

1. Receipts.
2. Canceled checks.
3. An extemporaneous list made during tax preparation.
4. Paid invoices.

Which of the following is a condition that causes the penalty for substantial understatement?

1. The taxpayer fails to file the return by the due date, and there is a balance due.
2. The taxpayer fails to pay the tax owed by the due date.
3. The taxpayer shows negligence or disregard for the rules or regulations, causing an underpayment.
4. The taxpayer understates their tax by the larger of $5,000 or 10% of the correct tax.

Jemaiyo won $500 at Lucky Casino and $1,250 at Riverboat Casino. His losses for the year at Lucky Casino were $800 and his losses at Riverboat Casino were $900. He also spent $100 for lottery tickets without winning anything. How much can he deduct on Schedule A for gambling losses?

1. $1,400
2. $1,700
3. $1,750
4. $1,800

Beginning in Tax Year 2018, which of these is generally not allowed as an expense on Schedule C?

1. Meal expenses.
2. Travel expenses.
3. Entertainment expenses.
4. Depreciation.

Which of these federal penalties is a 20% penalty?

1. Late payment penalty.
2. Substantial understatement.
3. Late filing penalty.
4. Understatement of income by a tax preparer.

To calculate the tax owed when there are capital gain distributions on the tax return, you would use ___________.

1. Tax tables
2. Schedule D Tax Worksheet
3. Qualified Dividends and Capital Gain Tax Worksheet
4. Tax rate schedule

When can estate tax be deducted on Schedule A?

1. Whenever estate tax is paid by a taxpayer.
2. There is no longer an estate tax deduction due to TCJA changes to Schedule A.
3. When it was paid with a decedent's final tax return.
4. When attributable to income in respect of a decedent that has been included in gross income.

Cafeteria plans _______.

1. Are only for health care reimbursements
2. Provide after-tax money for reimbursements
3. May reimburse nondeductible expenses, such as nonprescription drugs, if they are prescribed by a doctor
4. Are the same as an HSA

Rental income is generally:

1. Other income.
2. Nonpassive income.
3. Unearned income and does not qualify for the Earned Income Tax Credit.
4. Earned income and qualifies for the Earned Income Tax Credit.

Which of the following is a condition that causes the penalty for negligence or intentional disregard?

1. The taxpayer fails to file the return by the due date, and there is a balance due.
2. The taxpayer fails to pay the tax owed by the due date.
3. The taxpayer shows negligence or disregard for the rules or regulations, causing an underpayment.
4. The taxpayer understates their tax by the larger of $5,000 or 10% of the correct tax.

Deductible rental expenses do NOT include:

1. Cleaning of common areas.
2. The value of the owner's labor.
3. Repairing, but not replacing a roof.
4. Real estate taxes.

The amount reported on Schedule 1 (Form 1040) as a self-employed health insurance deduction may not exceed __________.

1. Fifty percent of net self-employment income
2. The Annual Premium Amount of SLCSP (taken from Form 1095-A)
3. The net income from the self-employment activity under which the plan was established, minus any amounts on Schedule 1, line 14 and 15, that are attributable to the activity
4. The gross income from the self-employment activity under which the plan was established, minus any amounts on Schedule 1, line 14 and 15, that are attributable to the activity

Why should records be kept for business-use assets such as video equipment and vehicles?

1. They are depreciable assets whose depreciation percentage wont change each year.
2. Just in case the taxpayer goes out of business.
3. Good records can substantiate the portion written off as business expense on these assets commonly used for both business and personal.
4. All of these are important reasons for keeping records of these assets.

Saul owns and operates a sports agency. In 2020, he purchased and placed the following new assets into service for his business: (1) March 7, a $1,500 phone system; (2) June 1, a $900 desk; (3) September 24, a $3,000 computer. What is the total 2020 depreciation for the desk, assuming he did not opt out of bonus depreciation?

1. $129
2. $900
3. $1,029
4. $2,810

Review each of the following choices. Based on the information provided, which taxpayer is most likely to benefit by deducting state and local general sales taxes rather than the amount of state and local income taxes paid during the year?

1. Kim, who purchased a lot of consumer goods during the year, but neglected to keep her receipts.
2. Rick, a self-employed contractor who pays a high sales tax on materials used in his business.
3. Terry, who lives in a state with a high state income tax.
4. Maureen, who lives in a state with no income tax.

As a result of TCJA, which of these is an incorrect statement regarding alternative minimum tax (AMT)?

1. The changes made by TJCA are permanent changes to AMT.
2. Fewer taxpayers will be affected by AMT.
3. The income level for those to which AMT was applied was raised.
4. AMT is reported on Schedule 2 (Form 1040).

The medicare tax rate for a self-employed person is __________.

1. 2.9% of net self-employment income up to $137,700
2. 2.9% of net self-employment income
3. 15.3% of net self-employment income
4. 15.3% of net self-employment income greater than $137,700

When paid during the tax year, which of the following may be deductible on Schedule A?

1. State and local gasoline taxes.
2. Social security and medicare taxes.
3. Federal income tax paid for a prior year balance due.
4. Personal property tax.

Oisin received an extension of time to file his 2020 income tax return. He did not pay any amount due with his extension. He finally filed his return on August 3, with a $900 balance due. How much must he pay in failure-to-file and failure-to-pay penalties?

1. None, as long as he timely filed for the extension.
2. A failure-to-pay penalty of 0.5%, but no failure-to-file penalty.
3. A failure-to-pay penalty of 0.5% and a 5% failure-to-file penalty. (However, the failure-to-file penalty is reduced by the amount of the failure-to-pay penalty for an overall total of 5%.)
4. A failure-to-file penalty of 5% plus a 0.5% failure-to-pay penalty for an overall total of 5.5%.

Medical expenses reimbursed from a cafeteria plan _______.

1. Are deductible on Schedule A
2. Never include nonprescription drugs
3. Are excluded from income
4. Are reported in box 12 of Form W-2