Description
tax questions 85 all mutiple choice all need to be correct
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Sadi received interest from several different sources. Which of the following types of interest is nontaxable
on a federal return?
Interest income from municipal bonds.
Interest income earned from a certificate of deposit.
Interest income earned from a checking account.
Interest income received from a personal loan.
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Question 2 of 85.
Min Lee received the following items of income during the year:
●
●
●
●
$35,000 of wages.
$150 of dividends from a savings account at her credit union.
$200 of interest from a U.S. Savings Bond.
$250 of interest from a Treasury bill.
What amount will be reported on Min’s Form 1040, line 2b?
$350
$400
$450
$600
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Question 3 of 85.
Tucker is an unmarried, 29-year-old taxpayer. He received the following income for the year:
●
●
●
●
Wages: $44,500.
Interest from a bank savings account: $50.
Unemployment compensation: $7,000.
Gift from his father: $3,000.
How much of Tucker’s income is considered earned income?
$44,500
$44,550
$51,500
$54,550
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Question 4 of 85.
To avoid the risk of penalties, tax preparers must abide by rules regarding preparer tax identification
numbers (PTINs). Which of the following statements is TRUE regarding PTINs?
A PTIN is required semi-annually for anyone who prepares or assists in preparing federal tax returns for
compensation.
If a tax preparer does not have a PTIN, they can still prepare tax returns for compensation.
The IRS may provide a PTIN to taxpayers who are victims of identity theft.
The preparer must enter their PTIN on the tax return in the space provided.
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Question 5 of 85.
Lucca has a financial interest in a financial account in a foreign country. Where should this be reported on
his tax return?
Part I of the Schedule B (Form 1040).
Part II of the Schedule B (Form 1040).
Part III of the Schedule B (Form 1040).
Part II of Schedule 1 (Form 1040).
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Question 6 of 85.
When filing a tax return for a deceased taxpayer, who will need to file Form 1310, Statement of Person
Claiming Refund Due a Deceased Taxpayer, to claim a refund?
Court-appointed personal representative.
Decedent’s adult child who was not appointed as the personal representative.
Executor or administrator of the decedent’s estate, as appointed or certified by the court.
Surviving spouse filing a joint return.
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Question 7 of 85.
Ricky and his wife, Sarah, are filing their tax return. Which of the following statements regarding signing the
return is NOT correct?
A joint return must be signed by both the taxpayer and the spouse.
Every taxpayer must sign their own return.
When a tax return is filed electronically, there are no signature requirements for the taxpayer.
When a taxpayer signs their tax return, they declare, under penalties of perjury, that they have examined the return
and accompanying schedules and statements, and to the best of their knowledge and belief, they are true, correct,
and complete.
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Question 8 of 85.
What are the three factors needed to determine the filing requirement for a nondependent?
Dependent taxpayer test, joint return test, and citizen test.
Filing status, age, and income.
Marital status, filing status, and income.
Unearned income, earned income, and gross income.
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Question 9 of 85.
Michael and Amina are married and lived in a community property state the entire year. Michael earned
$40,000 in wages, and Amina earned $60,000. If Michael and Amina file separate returns, how much income
will be reported on their returns?
Michael: $20,000; Amina: $30,000.
Michael: $40,000; Amina: $60,000.
Michael: $50,000; Amina: $50,000.
Michael: $100,000; Amina: $0.
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Question 10 of 85.
What is the due date to file a 2022 Form 1040, U.S. Individual Income Tax Return, or request an extension?
January 31, 2023
April 18, 2023
June 15, 2023
October 16, 2023
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Question 11 of 85.
Kiri and Divina are registered domestic partners. Neither had dependents they could claim for 2022.
What is Kiri’s and Divina’s correct and most favorable 2022 filing status on the federal return?
Single.
Married filing jointly.
Married filing separately.
Qualifying surviving spouse.
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Question 12 of 85.
Which taxpayer has a potential qualifying child that meets the residency test?
Cedro (52) is single. His grandson, Zack (15), came to live with him in September of 2022. Zack did not provide more
than half of his own support.
Donald (26) is single. His brother, John (17), lived with him for five months of 2022. John is unmarried and did not
provide more than half of his own support.
Melody (28) is single. Her cousin, Autumn (22), moved in with her in August of 2022. Autumn did not provide more
than half of her own support.
Tanisha and Michelle are married and have a daughter, Kya (13). They all lived together the entire year. Kya did not
provide more than half of her own support.
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Question 13 of 85.
Kennedy is a qualifying child to three taxpayers:
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●
●
Her grandfather, whose AGI is $6,789.
Her father, whose AGI is $26,123.
Her uncle, whose AGI is $64,456.
Which taxpayer is entitled to claim Kennedy, if all three wish to do so?
Father.
Grandfather.
Uncle.
No one is entitled to claim Kennedy.
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Question 14 of 85.
For 2022, what is the gross income test for a taxpayer claiming a qualifying relative?
The potential dependent’s gross income must be less than:
$1,150
$4,300
$4,400
$12,950
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Question 15 of 85.
Which taxpayer has a potential qualifying child that meets the age test? (Unless stated, none of these
individuals are permanently or totally disabled.)
Aiyden and Zuri are married and have a son, Caleb (25). Caleb is unmarried and a full-time student. Caleb earned
$11,000, all from wages, and he did not provide more than half of his own support. Caleb lives on campus while
school is in session. During the summer, Caleb lives with Aiyden and Zuri.
Lexi (42) has a daughter, Josie (19). Josie is unmarried and lived with Lexi all year. Josie decided to take a year-long
break from school before starting college. She worked part-time and earned $10,500, all from wages. She did not
provide more than half of her own support.
Omana (21) and her brother, Benji (23), lived together all year. Benji is unmarried and a full-time student. Benji had
no income and did not provide more than half of his own support.
Rohan (23) and his sister, Annie (25), lived together all year. Rohan and Annie are both unmarried. Annie is
permanently and totally disabled. Annie had no income, and did not provide more than half of her own support.
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Question 16 of 85.
In 2022, Rich (28) lived with his daughter, Ava (4), his brother, Joe (18), and his fiancée, Linda (30) for the
entire year. Rich’s adjusted gross income is $36,555, Joe’s gross income is $4,100, Linda’s gross income is
$5,900, and Ava has no income. None of the individuals in the household were disabled or students during
the year. Neither Joe, nor Linda, nor Ava provided over half of their own support. Rich qualifies for and files
as head of household in 2022. How many qualifying dependents can Rich claim on his return?
One.
Two.
Three.
Four.
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Question 17 of 85.
Which of the following statements regarding the “tiebreaker” rules for claiming benefits, including the
Earned Income Credit (EIC), is TRUE?
If the parents choose to file separately, they can split the benefits however they decide.
The parent who files first during the filing season takes precedence over the other parent.
If the parents are not filing jointly, the parent with whom the child lived for the longer period of time during the year
takes precedence.
Between two non-parents, the person with whom the child stayed the most nights takes precedence.
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Question 18 of 85.
Kaden and Cherie were divorced in 2019. The divorce decree granted them joint custody of their son, Bryce.
Bryce, now age 15, lived with Cherie until June 20. On June 21, Bryce went to stay with Kaden and lived there
the remainder of the year. Bryce did not provide more than half of his own support.
Bryce stayed with Cherie 171 nights and with Kaden 194 nights during the year. Which statement is correct?
Cherie is entitled to claim Bryce as a qualifying child dependent.
Kaden is entitled to claim Bryce as a qualifying child dependent.
Kaden and Cherie must split all dependency benefits for Bryce.
Neither Kaden nor Cherie are entitled to claim Bryce as a qualifying child dependent.
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Question 19 of 85.
Mrs. Yang is married and does not wish to file a joint return. She provided more than half of the cost of
maintaining the home for the tax year, where she and her son lived. Her son is age 11 and her qualifying
child dependent. Mr. Yang left on February 14, and Mrs. Yang has not seen her husband since. What is Mrs.
Yang’s correct and most favorable filing status for 2022?
Single.
Married filing jointly.
Married filing separately.
Head of household.
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Question 20 of 85.
Terry and Sal divorced in 2019. During 2022, their son Nick lived with his mother, Terry, Terry’s mother
(Andrea), and Terry’s best friend (Vanna) from January 1 to November 1. During that time, Nick visited Sal
every other weekend for a total of 40 nights.
On November 2, Nick went to live with Sal for the rest of the year. After that time, Nick visited Terry, Andrea,
and Vanna every other weekend for a total of 16 nights.
Terry’s adjusted gross income (AGI) was $33,100, Andrea’s AGI was $21,500, Vanna’s AGI was $32,600, and
Sal’s AGI was $29,900.
Who has the superior claim to Nick’s dependency?
Andrea.
Sal.
Terry.
Vanna.
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Question 21 of 85.
Sergio and Malena were married for 10 years before Malena unexpectedly passed away in 2021. Sergio has a
qualifying child dependent, Tomas (age 6), who lived with him all year. Sergio pays all the cost of maintaining
the home for himself and Tomas. Sergio has not remarried. In 2021, Sergio filed his tax return as married
filing jointly. Provided Sergio does not remarry by December 31 of the current tax year, what is Sergio’s
correct and most favorable filing status for 2022?
Single.
Married filing separately.
Qualifying surviving spouse.
Head of household.
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Question 22 of 85.
Stan would like to claim his grandson, Spencer, as his qualifying child so he can claim the Earned Income
Credit (EIC). However, Spencer’s mother, Alma, is also eligible to claim Spencer as her qualifying child for
EIC purposes. As Stan’s tax preparer, what information would you share with Stan?
Alma holds a higher right and may claim EIC based on Spencer, because Alma is Spencer’s parent.
As long as Stan files before Alma, he may claim EIC based on Spencer, his qualifying child.
Stan and Alma may agree to each claim one-half of the EIC based on Spencer, their qualifying child.
Stan may claim EIC based on Spencer if his adjusted gross income is higher than Alma’s.
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Question 23 of 85.
If a taxpayer’s Earned Income Credit is disallowed due to reckless or intentional disregard of the rules, there
is a waiting period after the disallowance. How long is the waiting period?
Sixty to ninety days.
Six months to one year.
Two to ten years.
Fifteen to twenty years.
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Retirement
Question 24 of 85.
Robin received a Form 1099-R with a distribution code 7. How should Robin’s distribution be treated for tax
purposes?
The distribution is a normal distribution and is not subject to an additional tax.
The distribution is eligible for the 10-year option method.
The distribution is subject to a 10% additional tax.
The distribution should be treated as a rollover.
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Question 25 of 85.
A taxpayer may qualify for one of several exceptions to the additional tax on early distributions. Which of
these would be an exception?
A 401(k) distribution made to an alternate payee under a qualified domestic relations order (QDRO).
A 401(k) distribution of $10,000 to pay qualified first-time homebuyer expenses.
A 401(k) distribution used to pay higher education costs.
An IRA distribution to pay off credit card debt.
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Question 26 of 85.
Beverly inherited a traditional IRA from her father. There was $100,000 in the account when she inherited the
IRA. Her father had made $20,000 in nondeductible contributions. What is Beverly’s basis in the inherited
IRA?
$0
$20,000
$80,000
$100,000
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Question 27 of 85.
Harry (71), a single taxpayer, began receiving a pension of $3,500 per month for life on May 1, 2009. He has
after-tax contributions in the plan. His 2022 Form 1099-R is shown below. Box 2a is blank. Which of the
following statements is CORRECT?
Answer choices are below the image.
$42,000 is taxable.
Harry is subject to a 10% additional tax.
None of Harry’s distribution is taxable.
The taxable distribution is figured using the Simplified Method Worksheet.
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Question 28 of 85.
Jeff (55) and Tara (49) are filing jointly for 2022. Jeff earned $40,000, and Tara earned $2,500. Jeff may
contribute up to $7,000 to his IRA for 2022. If Jeff contributes $5,000 to his IRA, how much can they
contribute to Tara’s IRA for 2022?
$2,000
$2,500
$6,000
$7,000
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Question 29 of 85.
Effective January 1, 2023, the SECURE 2.0 Act of 2022, Section 107, increased the age at which individuals
must begin taking required minimum distributions (RMDs) from traditional IRAs and workplace retirement
plans. The age has been increased from age 72 to which age?
73
74
75
76
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Question 30 of 85.
Ellen and her husband were legally divorced in 2017. After the divorce, Ellen retained physical custody of
their children. Ellen received the following amounts from her ex-husband, on behalf of the children or as
ordered by the court through a divorce decree:
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●
Court-ordered child support of $1,000 per month.
Court-ordered alimony of $500 per month.
How much of this income should be reported on Ellen’s federal return?
$0
$6,000
$12,000
$18,000
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Question 31 of 85.
Which of the following is an example of taxable alimony?
A cash or check payment made under a decree of divorce or separation. The marriage settlement agreement was
signed before December 31, 2018.
Child support payments.
A property transfer made within one year of a divorce.
Voluntary payments made outside of an agreement or a court decree of divorce or separation.
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Question 32 of 85.
Brian and Joy are divorced. Their divorce settlement agreement signed on June 1, 2017, states Brian must
pay Joy $1,000 per month for child support and $1,000 per month for alimony.
Joy’s child support payments are:
Considered alimony.
Fully taxable.
Nontaxable.
Partially taxable.
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Question 33 of 85.
Which of the following statements is CORRECT regarding the married filing separately filing status? When a
couple decides to file married filing separately:
Both spouses must take the standard deduction.
If one spouse itemizes, the other spouse must itemize and could have a deduction smaller than the standard
deduction.
One spouse may take the standard deduction and the other spouse must itemize.
The standard deduction for taxpayers using the married filing separately status is different from the single filing
status.
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Question 34 of 85.
In 2019, Zoya purchased her principal residence for $400,000. On January 15, 2022, when she owed $360,000
on the original mortgage, she took out a home equity loan. In January 2022, the fair market value of the home
was $490,000. The home equity loan proceeds were used to purchase a new car and pay off credit cards. It
was not used to build, buy, or improve her home. During the year, she paid $6,350 in interest on her first
mortgage and $1,490 in interest on the home equity loan. What amount of mortgage interest can Zoya deduct
on her Schedule A (Form 1040), Itemized Deductions?
$1,490
$4,860
$6,350
$7,840
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Question 35 of 85.
Justin won $1,000 at Lucky Casino and $1,350 at Riverboat Casino. His losses for the year at Lucky Casino
were $2,000 and his losses at Riverboat were $800. He also spent $100 for lottery tickets without winning
anything. How much can he deduct on Schedule A (Form 1040), Itemized Deductions, for gambling losses?
$0
$2,350
$2,800
$2,900
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Question 36 of 85.
Paloma purchased a home with her husband, Neville, in January of 2021 for $700,000. In June of 2021,
Paloma and Neville separated. On December 31, 2022, they were still legally married but did not live together
all year. They do not live in a community property state. Neville refused to file a joint return with Paloma.
Paloma filed her return using the married filing separately filing status. Paloma is living in the home and has
continued to make the mortgage payments using funds from her own account. Paloma will be itemizing her
deductions. On what portion of the acquisition debt will interest be deductible on Paloma’s tax return for
2022?
$0
$350,000
$375,000
$700,000
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Question 37 of 85.
On the Schedule A (Form 1040), Itemized Deductions, the deduction for state and local income taxes is
limited to what amount?
$10,000 ($5,000 if MFS).
$50,000 ($25,000 if MFS).
$100,000 ($50,000 if MFS).
There is no limit on the deduction of state and local income taxes.
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Question 38 of 85.
Choose the response that accurately completes the following sentence. Written acknowledgment from the
donee for contributions to qualified charitable organizations is required when a taxpayer makes a single
donation of:
$50 or more.
$100 or more.
$250 or more.
$500 or more.
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Question 39 of 85.
If a taxpayer’s total deduction for all noncash contributions for the year is over $500, which form must be
filed?
Form 2106.
Form 4684.
Form 8283.
Schedule 1 (Form 1040).
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Question 40 of 85.
Nash was reimbursed in 2022 by his insurance company for a medical expense that he had previously
deducted on his 2021 Schedule A (Form 1040), Itemized Deductions. What is the tax treatment of the
recovered medical expense, if any?
The amount recovered is not taxable and should not be included on the 2022 return.
The amount recovered should be deducted on Schedule A (Form 1040), Itemized Deductions, as a medical expense
again in 2022.
The recovery is includable in income in the year received up to the amount by which the deduction or credit claimed
reduced taxes in the prior year.
The 2021 return must be amended to remove the medical expense that was recovered.
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Question 41 of 85.
Jamal purchased his home in 2019. In 2022, he installed energy efficient windows that meet the Energy Star
most efficient certification requirements for a total cost of $1,600. He also installed exterior doors that meet
the Energy Star requirements for a total cost of $2,100. His tax liability is $3,900. Jamal had a Residential
Energy Property Credit in a previous year in the amount of $300. What is the amount of his Energy Efficient
Home Improvement Credit?
$200
$370
$500
$3,700
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Question 42 of 85.
The Premium Tax Credit is a credit that helps pay the cost of health care coverage through the Health
Insurance Marketplace. All the following are true, EXCEPT:
Form 8962, Premium Tax Credit, calculates the taxpayer’s Premium Tax Credit and reconciles it with any Advance
Premium Tax Credit (APTC) received.
Taxpayers are not required to reconcile the Premium Tax Credit.
The Premium Tax Credit is either advanced to the taxpayer or refunded through their income tax return as a
refundable credit.
The tax household includes the taxpayer, spouse, and anyone who is claimed as a dependent on the tax return.
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Question 43 of 85.
Joshua purchased a qualified plug-in electric motor vehicle on June 2, 2022. He qualifies for the Qualified
Plug-in Electric Drive Motor Vehicle Credit. Joshua may qualify for a credit of what amount?
10% of the purchase price of the vehicle.
$8,000 per qualifying vehicle.
The credit ranges from $2,500 to $7,500, depending on battery capacity and other factors.
The credit ranges from $2,500 to $7,500, depending on the purchase price of the vehicle.
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Question 44 of 85.
What is the maximum amount of tax years a student may claim the lifetime learning credit?
Two years.
Four years.
Five years.
An unlimited number of tax years.
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Question 45 of 85.
Barry is a junior at the University of Phoenix. For 2022, he received a Form 1098-T, Tuition Statement,
showing his tuition and scholarship amounts. Assuming all requirements are met, what is the maximum
amount Barry could claim for the American Opportunity Tax Credit?
$1,500Question 46 of 85.
Donna owned a house for which she paid $300,000. She added a new room at a cost of $10,000. She later
sold the house for $350,000 and paid a $20,000 sales commission. What is Donna’s gain or loss?
$20,000 gain.
$20,000 loss.
$40,000 gain.
$50,000 gain.
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Question 47 of 85.
Which of the following is used to calculate the tax due when a taxpayer’s only investment income is from
capital gain distributions from a mutual fund?
Alternative Minimum Tax Worksheet.
Estimated Tax Worksheet.
Qualified Dividends and Capital Gain Tax Worksheet.
Schedule D Tax Worksheet.
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Question 48 of 85.
Owen received the following Form 1099-B reporting the sale of 100 shares of stock. How should the sale of
this property be reported on his tax return?
Answer choices are below the image.
Short-term capital loss of $1,660.
Long-term capital loss of $1,660.
Short-term capital gain of $1,660.
Long-term capital gain of $6,640.
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Question 49 of 85.
Jordyn is single. She purchased her first home for $180,000 in 2018. It served as her primary residence until
she sold it on November 1, 2022 for $440,000. She paid a $26,400 commission as an expense of sale. During
the time she owned her home, she did not use it for business or to produce rental income. What is the
amount of her long-term gain that can she exclude from income on her return?
$233,600
$250,000
$260,000
$440,000
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Question 50 of 85.
In 2022, using a cryptocurrency platform, Sam sold Bitcoin that he held as a capital asset, as an individual.
How will this sale be reported on Sam’s tax return?
Sam will check the “Yes” box next to the question on virtual currency on page 1 of Form 1040 and:
He will use Form 8949 to figure his capital gain or loss and report it on Schedule D (Form 1040).
He will use Schedule C (Form 1040) to report the sale.
He will use Schedule E (Form 1040) to report the sale.
The gain or loss from the sale of virtual currency is not taxable and does not need to be reported anywhere else on
his return.
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Question 51 of 85.
Stevie received significant dividend income during the tax year. How should she report the dividend income
if she has ordinary dividend income in excess of $1,500?
On Form 1040, line 3a.
On Form 1040, lines 3a and 3b.
On Schedule B and Form 1040, line 3a.
On Schedule B and Form 1040, line 3b.
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Question 52 of 85.
Uri and Autry are married and will file a joint return. They purchased their first home in 2016. The home
served as their primary residence until June 2022, when they sold the home. They had a long-term capital
gain of $600,000. Uri and Autry meet the ownership and use tests. How much of the long-term gain can they
exclude from income on their return?
$0
$250,000
$500,000
$600,000
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Question 53 of 85.
On October 1, 2021, Sara purchased 80 shares of JEP stock for $2,000. On September 30, 2022, she sold the
80 shares for $1,500. What is Sara’s gain or loss?
A long-term gain of $500.
A long-term loss of $500.
A short-term gain of $500.
A short-term loss of $500.
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$2,000
$2,500
$4,000
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Question 54 of 85.
Ross filed a tax return for Allie. During the interview conducted by Ross, Allie stated that she had made a
charitable contribution of artwork in the amount of $20,000 during the tax year, when in fact she had not
made this charitable contribution. Ross did not inquire about the existence of a qualified appraisal or
complete a Form 8283, Noncash Charitable Contributions. Ross reported the deduction on the return, signed
the return as the paid preparer, and charged $500 for the tax preparation. The IRS audited the client and Ross
will face a penalty for understatement of a taxpayer’s tax liability. What is the penalty?
$250
$500
$1,000
$5,000
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Question 55 of 85.
Choose the response that accurately completes the following sentence. To meet one of the due diligence
requirements of a paid tax preparer, it is not enough to ask more questions; tax preparers must also:
Audit the return.
Ask clients for two references to verify the information.
Perform employment verification checks on all Earned Income Credit clients.
Immediately document the questions asked and the client’s responses.
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Question 56 of 85.
What does Internal Revenue Code Section 7525 privileged communication apply to?
Corporate tax matters.
Criminal tax matters.
State tax law.
Tax advice.
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Question 57 of 85.
Choose the response that accurately completes the following sentence. A tax preparer’s high ethical
standards protect taxpayers by:
Guaranteeing their returns will not be questioned by the IRS.
Promising they will be free from IRS penalties.
Eliminating the need for preparer due diligence notes.
Providing them with an accurate return, including all tax benefits to which they are entitled.
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Question 58 of 85.
What is the penalty a paid tax return preparer would face who failed to report all their client’s income by
taking an unreasonable position on the tax return? (The preparer charged $500 for the tax preparation.)
$250
$500
$1,000
$5,000
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Question 59 of 85.
Generally, a tax preparer must never provide a taxpayer’s confidential information to any other party.
However, there are some exceptions allowing for limited disclosure. Which of the following are valid
exceptions?
The co-habitation exception and the written consent exception.
The related party exception and the shared child exception.
The related party exception and the written consent exception.
There are no exceptions, and tax preparers must never share tax return information under any circumstances.
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Question 60 of 85.
Joshua and Donna were married. Mya has been their tax preparer for many years. During a meeting with Mya,
they disclosed they recently divorced. Mya explained to both of them that a conflict of interest has arisen in
their case. They decided to waive the conflict, and both signed separate waivers to continue with Mya as
their tax preparer. What is the minimum amount of time that Mya is required to retain the waivers?
36 days from the conclusion of service.
36 weeks from the conclusion of service.
36 months from the conclusion of service.
Four years from the conclusion of service.
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Question 61 of 85.
Carlos is self-employed. During the year, he had the following business income and expenses. What is his
gross income for the tax year?
●
●
●
●
●
●
●
●
Income $16,050
Cost of goods sold $5,000
Advertising $1,000
Legal and professional fees $280
Office expense $125
Supplies $310
Business license $100
Utilities $420
$8,815
$11,050
$13,815
$16,050
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Question 62 of 85.
Arthur had the following business expenses for Tax Year 2022:
●
●
Entertainment: $2,330
Meals: $1,448 (The meals were provided by a restaurant.)
What is Arthur’s allowable business expense deduction for 2022?
$724
$1,448
$1,889
$3,778
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Question 63 of 85.
Tina is a sole proprietor. She operates a sporting goods store. Her gross revenue is $95,000 for 2022. Which
of the following expenses would NOT meet the definition of “ordinary and necessary expense”?
$120 per month for a mobile phone used exclusively for the business.
$1,500 for advertising costs.
$2,000 for gifts given to four customers. Each gift is valued at $500.
$30,000 in wage expenses paid to three part-time employees.
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Question 64 of 85.
Pat started a new business on September 1, 2022. He is self-employed. He drove 500 business miles from
September 1 – December 31, 2022. He qualifies to use the standard mileage rate. What amount will be
entered on line 9 of his Schedule C (Form 1040)?
$280
$293
$313
$500
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Question 65 of 85.
With a qualified business income (QBI) deduction, business owners may receive a deduction of what percent
off their business income?
5%
10%
20%
25%
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Question 66 of 85.
Donald is a general partner in a partnership; his share of ordinary income was reported in box 14 of
Schedule K-1. Which of the following statements is TRUE?
Donald is considered an employee.
The amount of income reported in this box will be taxed at the rate that applies to long-term capital gains.
His ordinary income is not subject to self-employment tax.
His ordinary income is subject to self-employment tax.
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Question 67 of 85.
Arlene lives in a 700-square-foot studio apartment. Her rent is $1,300 monthly. She runs her own catering
business and cooks client meals in her kitchen. Arlene’s kitchen is 300 square feet. She also cooks her
personal meals in the kitchen.
What percentage of her rent may Arlene deduct as a business-use-of-home expense?
0%
43%
57%
100%
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Question 68 of 85.
Which taxpayer may be able to deduct home office expenses?
Doug is self-employed. His office is away from his home but he uses his home occasionally for business.
Manny uses an extra room in his home for business purposes. His children also use the space to do their homework
and play video games.
Randy, a self-employed interior designer, uses part of his home for business. He uses it regularly and exclusively to
meet with clients.
Sue is an employee of ABC Corporation. She works remotely from home three days a week.
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Question 69 of 85.
The self-employment tax rate is 15.3%. What is included in self-employment tax?
FUTA and SUTA tax on net income from self-employment.
Social security tax and FUTA tax on net income from self-employment.
Social security tax and medicare tax on gross income from self-employment.
Social security tax and medicare tax on net income from self-employment.
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Question 70 of 85.
For Tax Year 2022, a taxpayer generally may elect to immediately claim up to what amount for the Section
179 deduction?
$25,000
$1,050,000
$1,080,000
$2,700,000
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Question 71 of 85.
Special limitations apply to the amount of depreciation that can be claimed for passenger vehicles. What is
the maximum amount of depreciation for a vehicle placed in service in 2022, with no bonus depreciation
claimed?
$10,200
$11,200
$18,000
$19,200
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Question 72 of 85.
Which of the following will increase the basis of property?
Capital improvements.
Casualty deduction.
Depreciation.
Tax credit.
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Question 73 of 85.
Carly owns a rental house. Her current tenant, Korey, signed a two-year lease and moved into the house in
January 2022. At that time, Korey paid Carly $1,500 for the first month’s rent and $1,500 as a refundable
security deposit. Korey paid the $1,500 rent in cash on the first of each month during the year, except in
November when he replaced the water heater in exchange for his rent. The water heater would have cost
Carly $1,300 to purchase and install. How much rental income must Carly report for the tax year?
$16,500
$17,800
$18,000
$19,300
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Question 74 of 85.
Which of the following statements is TRUE regarding travel and transportation expenses related to rental
property?
Only the standard mileage rate may be claimed for transportation expenses to look after a rental property.
Taxpayers should keep records of their mileage and travel expenses to substan
