Tax Question

A taxpayer dies on March 31, 2012. For estate tax purposes, what is the alternate valuation date for the taxpayer’s estate?

September 30, 2012

December 31, 2012

April 15, 2013

March 31, 2013

Which of the following enrolled practitioners has the most limited areas of practice before the IRS?

Enrolled Agent

Certified Public Accountant

Attorney

Enrolled Actuary

When should a tax payer calculate a taxpayer’s itemized deduction on Schedule A?

After determining the tax payer’s gross income

After determining the tax payer’s adjusted gross income

Before determining the tax payer’s adjusted gross income

Before determining the tax payer’s gross income

Which of the following taxes is deductible on Schedule A as an itemized deduction?

State inheritance tax

Qualified foreign income taxes

Employment taxes

Federal income taxes

On a jointly filed return (MFJ) both spouses are ___________________for all the tax due even if one spouse earned all the income.

Independently liable

Jointly and severally liable

Partially liable

Not responsible

Carlos is age 32 and single. His AGI for 2012 was $33,200. Of this amount, $3,000 was from gambling winnings. He had the following itemized deductions:

• Medical expenses (gross amount) $10,400

• Mortgage interest on main home $6,700

• Property tax on main home $2,300

• Miscellaneous unreimbursed work expenses $1,200

• Charitable donation to his church $1,600

• Gambling losses $4,600 After applying AGI limitations, what is the amount of his allowable itemized deductions on Schedule A?

$22,046

$22,710

$24,310

$19,710

Kristin and Santiago file a joint return. Their adjusted gross income is $48,000. During the year, they paid the following medical expenses:

• Copayments for prescription drugs $500

• Dentist fees $1,200

• Medical insurance premiums $300

• Life insurance premiums $500

• Long-term care insurance premiums $100

• Vitamins $90 • Hospital bill $3,000

• Prescription eyeglasses $350

Total costs $6,040 After the application after the application of the 7.5% of AGI limit what is Kristin and Santiago’s total qualified medical expense.

$3,600

$1,850

$453

$4,190

Which of the following requirements must be met in order for a single individual to qualify for the additional standard deduction?

Must support dependent child or aged parent

Yes

No

Must be age 65 or older or blind

Yes

No

During the year, Sophia paid $15,000 in mortgage interest on her primary residence. She also paid $3,900 in mortgage interest on her second home and $6,700 in loan interest on a recreational vehicle (RV) with sleeping, cooking, and toilet facilities. What is Sophia’s maximum mortgage interest deduction on Schedule A?

$15,000

$18,900

$21,700

$25,600

In 2011, Jeffrey gives $25,000 to his girlfriend, Rachel. Which of the following statement is true?

The first $13,000 of the gift is not subject to the gift tax, but the remainder is subject to gift tax, and Rachel is responsible for paying it.

Rachel is required to file a gift tax return and pay tax on the entire gift

Jeffrey is required to file a gift tax return, Form 709

Jeffrey may choose to report the gift tax on Form 1040, Schedule A

Which form is used to report estate tax for the tax year 2012?

Form 706

Form 1040

Form 1041

Form 990

Erik sold his home for $275,000. His selling expenses were $10,000. What is the amount realized on this sale?

$265,000

$275,000

$285,000

Some other amount

In general, who is responsible for paying the gift tax?

The estate

The donor

The receiver of the gift

The executor

Which of the following is NOT a valid filing status?

Married Filing Jointly

Head of Household

Separated

Single

Which form would be used to file when the following information is provided: i. Taxable income exceeds $100k

ii. Deductions will be itemized

iii. Has a valid Social Security Number

Form 1040

Form 1040A

Form 1040EZ

Form 1040NR

Melanie is a full time, foreign student from St. Lucia that is studying at a four year college in Miami. She works as a Professors Assistant and receives compensation for her service. Which form will she have to use to file her return?

Form 1040

Form 1040A

Form 1040EZ

Form 1040NR

What is the main difference between Form 1099 and Form 1098?

Form 1098 reports expenses taxpayers have paid, while Form 1099 reports income that a taxpayer has received

There is no real difference between Form 1099 and Form 1098 There is no real difference between Form 1099 and Form 1098

Form 1099 is used for taxpayers, while Form 1098 is used for entities

Nina pays for daycare for each of the following individuals so she can work. All of the following are qualifying individuals for the purposes of the Child and Dependent Care Credit, EXCEPT:

Nina’s husband, who is totally disabled Nina’s son, age 13, who is Nina’s dependent Nina’s nephew, age 12, who is also Nina’s dependent

Nina’s niece, who is 35, lived with her all year, and is completely disabled

Edwin is a professional bookkeeper. He decides to take an accounting course at the local community college in order to improve his work-related skills. Edwin is not a degree candidate. Which educational credit does he qualify for?

The American Opportunity Credit

The College Credit

The Lifetime Learning Credit

The Mortgage Interest

Credit Patrice’s antique Persian rug was damaged by a new kitten before it was housebroken. Patrice estimates the loss at $4,500. Her AGI for the year is $50,000. How much of the casualty loss may she deduct?

$0

$4,500

$3,000

$2,900

Deductions to the following organizations are subject to the 50% limitation on deductible contributions:

Churches

Hospitals

Fraternal societies such as the Kiwanis and the Lions Club

Both A and B

During a fundraising auction at his social church, Lyle pays $600 for a week’s stay at a beachfront hotel, where he stays during a vacation in August. He intends to make the payment as a contribution, and all the proceeds go to help the church. The FMV of the stay is $590. What is Lyle’s charitable contribution?

$0

$10

$590

$600

Which of the following taxes can taxpayers deduct on Schedule A?

Local sales taxes

Fines for speeding

Social Security taxes

Homeowner’s association fees

What is the penalty for a preparer who negotiates a taxpayer’s refund check?

No penalty

$500 per occurrence

$00 per year

$1,000 per occurrence

Eric incurred the following expenditures in connection with his rental property. Which of them should be capitalized and depreciated?

New roof

New cabinets

Paving of driveway

All of the above