Individual Tax Issues - CPA Regulation (REG)
Card 1 of 120
The following year-1 annual report was received by Clark from the qualified defined contribution plan provided by Clark's employer:
- Beginning balance: $12,700
- Employer contribution: 600
- Plan earnings: 250
- Ending balance: $13,550
What income must be included in Clark's gross income for year 1?
The following year-1 annual report was received by Clark from the qualified defined contribution plan provided by Clark's employer:
- Beginning balance: $12,700
- Employer contribution: 600
- Plan earnings: 250
- Ending balance: $13,550
What income must be included in Clark's gross income for year 1?
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Clark did not receive the money in the qualified defined contribution plan, and as such will not have to report the income. Depending on the type of defined contribution plan, Clark may have to report benefits received as income, but only after he is eligible for regular distributions from the retirement plan.
Clark did not receive the money in the qualified defined contribution plan, and as such will not have to report the income. Depending on the type of defined contribution plan, Clark may have to report benefits received as income, but only after he is eligible for regular distributions from the retirement plan.
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With regard to the inclusion of Social Security benefits in gross income, for the Year 18 tax year, which of the following statements is correct?
With regard to the inclusion of Social Security benefits in gross income, for the Year 18 tax year, which of the following statements is correct?
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Inclusion of Social Security benefits in gross income is largely dependent on the amount and types of other income a taxpayer receives in the year. The result is that these benefits may not be taxed at all, or that at most 85% of benefits will be included in gross income.
Inclusion of Social Security benefits in gross income is largely dependent on the amount and types of other income a taxpayer receives in the year. The result is that these benefits may not be taxed at all, or that at most 85% of benefits will be included in gross income.
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Parker was employed for part of the year. Parker received $35,000 of wages, $6,400 from a state unemployment compensation plan, and $2,000 from her former employer’s company paid supplemental unemployment benefit plan. What is the amount of Parker’s gross income?
Parker was employed for part of the year. Parker received $35,000 of wages, $6,400 from a state unemployment compensation plan, and $2,000 from her former employer’s company paid supplemental unemployment benefit plan. What is the amount of Parker’s gross income?
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Each of these items is included in taxable income. Wages are generally taxable, as are any unemployment benefits received, no matter the source.
Each of these items is included in taxable income. Wages are generally taxable, as are any unemployment benefits received, no matter the source.
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A cash basis taxpayer should report gross income:
A cash basis taxpayer should report gross income:
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A cash basis taxpayer should report gross income for the year in which income is either actually or constructively received, whether in cash or in property.
A cash basis taxpayer should report gross income for the year in which income is either actually or constructively received, whether in cash or in property.
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Of the following amounts, which represents an adjustment to AGI for the current tax year?
Of the following amounts, which represents an adjustment to AGI for the current tax year?
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Alimony paid to a former spouse based on a divorce agreement executed on or before 12/31/18 is an adjustment to gross income.
Alimony paid to a former spouse based on a divorce agreement executed on or before 12/31/18 is an adjustment to gross income.
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Of the following, which is an itemized deduction?
Of the following, which is an itemized deduction?
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Qualified charitable contributions are the only itemized deductions listed here.
Qualified charitable contributions are the only itemized deductions listed here.
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A 22-year-old full-time student earned $11,000 in salary and received $9,000 in interest from corporate bonds. The bonds were a gift from the student's grandparents. The student's parents pay more than half of the student's support, including $25,000 in tuition. Which of the following statements is correct regarding the student's current-year income tax?
A 22-year-old full-time student earned $11,000 in salary and received $9,000 in interest from corporate bonds. The bonds were a gift from the student's grandparents. The student's parents pay more than half of the student's support, including $25,000 in tuition. Which of the following statements is correct regarding the student's current-year income tax?
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As a full-time student with more than $2,200 in unearned income (interest income), and who does not earn more than half their own support is subject to the kiddie tax. This tax applies only to unearned income, not earned, meaning the salary is subject only to regular income taxes.
As a full-time student with more than $2,200 in unearned income (interest income), and who does not earn more than half their own support is subject to the kiddie tax. This tax applies only to unearned income, not earned, meaning the salary is subject only to regular income taxes.
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June earned $400,000 in his business during the current year, and her husband Steve received investment income of $20,000. June provides more than half of the support for her 50-year-old widowed brother, who lives with June and earned $44,000 in salary. June also provides full support for her children, an 18-year-old daughter and a 20-year-old son, who is a full-time college student. The family employs a live-in housekeeper and a live-in butler to assist them with their residence. Both the housekeeper and butler provided all of their own support. How many people qualify as either a qualifying child or qualifying relative for June?
June earned $400,000 in his business during the current year, and her husband Steve received investment income of $20,000. June provides more than half of the support for her 50-year-old widowed brother, who lives with June and earned $44,000 in salary. June also provides full support for her children, an 18-year-old daughter and a 20-year-old son, who is a full-time college student. The family employs a live-in housekeeper and a live-in butler to assist them with their residence. Both the housekeeper and butler provided all of their own support. How many people qualify as either a qualifying child or qualifying relative for June?
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Only the children meet the qualifications of dependents (each as a qualifying child). Since the children receive full support from their parents and are either a) under 19 or b) under 24 and full-time college students, they meet the basic criteria as qualifying children. The widowed brother does not qualify because his gross income exceeds $4,300.
Only the children meet the qualifications of dependents (each as a qualifying child). Since the children receive full support from their parents and are either a) under 19 or b) under 24 and full-time college students, they meet the basic criteria as qualifying children. The widowed brother does not qualify because his gross income exceeds $4,300.
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Jake and Andrea contribute to more than half of the support of their three children, Kenny, Bryan, and Jennifer. Kenny, age 20, worked full time at the local bakery and earned $20,000. Bryan, 18, is a part-time college student who earned $6,000 working as a resident assistant in the student dormitory where he lived half the year. Jennifer, age 25, is an aspiring actress who lives at home with Jake and Andrea. Jennifer earned $2,500 for three commercials she starred in. Who qualifies as a dependent for Jake and Andrea under either the rules of qualifying child or qualifying relative?
Jake and Andrea contribute to more than half of the support of their three children, Kenny, Bryan, and Jennifer. Kenny, age 20, worked full time at the local bakery and earned $20,000. Bryan, 18, is a part-time college student who earned $6,000 working as a resident assistant in the student dormitory where he lived half the year. Jennifer, age 25, is an aspiring actress who lives at home with Jake and Andrea. Jennifer earned $2,500 for three commercials she starred in. Who qualifies as a dependent for Jake and Andrea under either the rules of qualifying child or qualifying relative?
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Only Bryan and Jennifer qualify. Bryan is considered a qualifying child since he is under age 19, lives with his parents half the year, and receives more than half his support from his parents. Jennifer is considered a qualifying relative since she is a child of the parents, receives more than half her support from them, and makes less than $4,300 in gross income. Kenny is over 19, not a college student, and makes over $4,300 in gross income, which disqualifies him as a dependent.
Only Bryan and Jennifer qualify. Bryan is considered a qualifying child since he is under age 19, lives with his parents half the year, and receives more than half his support from his parents. Jennifer is considered a qualifying relative since she is a child of the parents, receives more than half her support from them, and makes less than $4,300 in gross income. Kenny is over 19, not a college student, and makes over $4,300 in gross income, which disqualifies him as a dependent.
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The Kent family has a 21 year old son Andrew, who is a full-time student at a university. Andrew received $10,000 in scholarships this year for academic achievement. He also works part time at the bookstore and earned $5,400 this year. The Kents paid $7,000 to support Andrew this year. Andrew was home for two months in the summer and at school for the rest of the year. Andrew used the scholarship, the wages from his part time job, and the money from his parents as his only source of support this year. Which of the following status’ does Andrew meet?
The Kent family has a 21 year old son Andrew, who is a full-time student at a university. Andrew received $10,000 in scholarships this year for academic achievement. He also works part time at the bookstore and earned $5,400 this year. The Kents paid $7,000 to support Andrew this year. Andrew was home for two months in the summer and at school for the rest of the year. Andrew used the scholarship, the wages from his part time job, and the money from his parents as his only source of support this year. Which of the following status’ does Andrew meet?
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Andrew meets the definition of qualifying child for the Kent family. He meets the close relative test because he is their son. He is under the age of 24 and is a full-time student so he meets the age limit. He meets the residency requirements because his principal place of residence is his parents home since he is only away as a student. He also does not provide more than half of his own support.
Andrew meets the definition of qualifying child for the Kent family. He meets the close relative test because he is their son. He is under the age of 24 and is a full-time student so he meets the age limit. He meets the residency requirements because his principal place of residence is his parents home since he is only away as a student. He also does not provide more than half of his own support.
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Of the following, which is or are among the requirements to enable taxpayers to be classified as a “qualifying widower”? A) The dependent has lived with the taxpayer for six months B) The taxpayer has maintained the cost of the principal residence for six months
Of the following, which is or are among the requirements to enable taxpayers to be classified as a “qualifying widower”? A) The dependent has lived with the taxpayer for six months B) The taxpayer has maintained the cost of the principal residence for six months
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These requirements do not enable a taxpayer to be classified as a qualifying widower.
These requirements do not enable a taxpayer to be classified as a qualifying widower.
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Jared has two children, an 18-year-old son and a 20-year-old daughter who is a full-time student. Both children have not made more than $1,000 each from their part-time jobs. Which of the following children would qualify as a qualifying relative or child?
Jared has two children, an 18-year-old son and a 20-year-old daughter who is a full-time student. Both children have not made more than $1,000 each from their part-time jobs. Which of the following children would qualify as a qualifying relative or child?
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Both of these children qualify as qualifying children. They are close relatives, they are within the age limit, receive their support from their father, and do not make enough income themselves.
Both of these children qualify as qualifying children. They are close relatives, they are within the age limit, receive their support from their father, and do not make enough income themselves.
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A 22-year-old full-time student earned $11,000 in salary and received $9,000 in interest from corporate bonds. The bonds were a gift from the student's grandparents. The student's parents pay more than half of the student's support, including $25,000 in tuition. Which of the following statements is correct regarding the student's current-year income tax?
A 22-year-old full-time student earned $11,000 in salary and received $9,000 in interest from corporate bonds. The bonds were a gift from the student's grandparents. The student's parents pay more than half of the student's support, including $25,000 in tuition. Which of the following statements is correct regarding the student's current-year income tax?
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As a full-time student with more than $2,200 in unearned income (interest income), and who does not earn more than half their own support is subject to the kiddie tax. This tax applies only to unearned income, not earned, meaning the salary is subject only to regular income taxes.
As a full-time student with more than $2,200 in unearned income (interest income), and who does not earn more than half their own support is subject to the kiddie tax. This tax applies only to unearned income, not earned, meaning the salary is subject only to regular income taxes.
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June earned $400,000 in his business during the current year, and her husband Steve received investment income of $20,000. June provides more than half of the support for her 50-year-old widowed brother, who lives with June and earned $44,000 in salary. June also provides full support for her children, an 18-year-old daughter and a 20-year-old son, who is a full-time college student. The family employs a live-in housekeeper and a live-in butler to assist them with their residence. Both the housekeeper and butler provided all of their own support. How many people qualify as either a qualifying child or qualifying relative for June?
June earned $400,000 in his business during the current year, and her husband Steve received investment income of $20,000. June provides more than half of the support for her 50-year-old widowed brother, who lives with June and earned $44,000 in salary. June also provides full support for her children, an 18-year-old daughter and a 20-year-old son, who is a full-time college student. The family employs a live-in housekeeper and a live-in butler to assist them with their residence. Both the housekeeper and butler provided all of their own support. How many people qualify as either a qualifying child or qualifying relative for June?
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Only the children meet the qualifications of dependents (each as a qualifying child). Since the children receive full support from their parents and are either a) under 19 or b) under 24 and full-time college students, they meet the basic criteria as qualifying children. The widowed brother does not qualify because his gross income exceeds $4,300.
Only the children meet the qualifications of dependents (each as a qualifying child). Since the children receive full support from their parents and are either a) under 19 or b) under 24 and full-time college students, they meet the basic criteria as qualifying children. The widowed brother does not qualify because his gross income exceeds $4,300.
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Jake and Andrea contribute to more than half of the support of their three children, Kenny, Bryan, and Jennifer. Kenny, age 20, worked full time at the local bakery and earned $20,000. Bryan, 18, is a part-time college student who earned $6,000 working as a resident assistant in the student dormitory where he lived half the year. Jennifer, age 25, is an aspiring actress who lives at home with Jake and Andrea. Jennifer earned $2,500 for three commercials she starred in. Who qualifies as a dependent for Jake and Andrea under either the rules of qualifying child or qualifying relative?
Jake and Andrea contribute to more than half of the support of their three children, Kenny, Bryan, and Jennifer. Kenny, age 20, worked full time at the local bakery and earned $20,000. Bryan, 18, is a part-time college student who earned $6,000 working as a resident assistant in the student dormitory where he lived half the year. Jennifer, age 25, is an aspiring actress who lives at home with Jake and Andrea. Jennifer earned $2,500 for three commercials she starred in. Who qualifies as a dependent for Jake and Andrea under either the rules of qualifying child or qualifying relative?
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Only Bryan and Jennifer qualify. Bryan is considered a qualifying child since he is under age 19, lives with his parents half the year, and receives more than half his support from his parents. Jennifer is considered a qualifying relative since she is a child of the parents, receives more than half her support from them, and makes less than $4,300 in gross income. Kenny is over 19, not a college student, and makes over $4,300 in gross income, which disqualifies him as a dependent.
Only Bryan and Jennifer qualify. Bryan is considered a qualifying child since he is under age 19, lives with his parents half the year, and receives more than half his support from his parents. Jennifer is considered a qualifying relative since she is a child of the parents, receives more than half her support from them, and makes less than $4,300 in gross income. Kenny is over 19, not a college student, and makes over $4,300 in gross income, which disqualifies him as a dependent.
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The Kent family has a 21 year old son Andrew, who is a full-time student at a university. Andrew received $10,000 in scholarships this year for academic achievement. He also works part time at the bookstore and earned $5,400 this year. The Kents paid $7,000 to support Andrew this year. Andrew was home for two months in the summer and at school for the rest of the year. Andrew used the scholarship, the wages from his part time job, and the money from his parents as his only source of support this year. Which of the following status’ does Andrew meet?
The Kent family has a 21 year old son Andrew, who is a full-time student at a university. Andrew received $10,000 in scholarships this year for academic achievement. He also works part time at the bookstore and earned $5,400 this year. The Kents paid $7,000 to support Andrew this year. Andrew was home for two months in the summer and at school for the rest of the year. Andrew used the scholarship, the wages from his part time job, and the money from his parents as his only source of support this year. Which of the following status’ does Andrew meet?
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Andrew meets the definition of qualifying child for the Kent family. He meets the close relative test because he is their son. He is under the age of 24 and is a full-time student so he meets the age limit. He meets the residency requirements because his principal place of residence is his parents home since he is only away as a student. He also does not provide more than half of his own support.
Andrew meets the definition of qualifying child for the Kent family. He meets the close relative test because he is their son. He is under the age of 24 and is a full-time student so he meets the age limit. He meets the residency requirements because his principal place of residence is his parents home since he is only away as a student. He also does not provide more than half of his own support.
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Of the following, which is or are among the requirements to enable taxpayers to be classified as a “qualifying widower”? A) The dependent has lived with the taxpayer for six months B) The taxpayer has maintained the cost of the principal residence for six months
Of the following, which is or are among the requirements to enable taxpayers to be classified as a “qualifying widower”? A) The dependent has lived with the taxpayer for six months B) The taxpayer has maintained the cost of the principal residence for six months
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These requirements do not enable a taxpayer to be classified as a qualifying widower.
These requirements do not enable a taxpayer to be classified as a qualifying widower.
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Jared has two children, an 18-year-old son and a 20-year-old daughter who is a full-time student. Both children have not made more than $1,000 each from their part-time jobs. Which of the following children would qualify as a qualifying relative or child?
Jared has two children, an 18-year-old son and a 20-year-old daughter who is a full-time student. Both children have not made more than $1,000 each from their part-time jobs. Which of the following children would qualify as a qualifying relative or child?
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Both of these children qualify as qualifying children. They are close relatives, they are within the age limit, receive their support from their father, and do not make enough income themselves.
Both of these children qualify as qualifying children. They are close relatives, they are within the age limit, receive their support from their father, and do not make enough income themselves.
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West is single, has no dependents, and does not itemize. West provides the following information regarding his current-year’s return:
- Long-term capital gain: $ 15,000
- Percentage depletion in excess of property’s adjusted basis: 9,000
- Dividends from publicly held companies: 10,000
What is the amount of West’s AMT tax preference items?
West is single, has no dependents, and does not itemize. West provides the following information regarding his current-year’s return:
- Long-term capital gain: $ 15,000
- Percentage depletion in excess of property’s adjusted basis: 9,000
- Dividends from publicly held companies: 10,000
What is the amount of West’s AMT tax preference items?
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Among the options provided, only the percentage depletion in excess of a property’s adjusted basis is included as an AMT tax preference item.
Among the options provided, only the percentage depletion in excess of a property’s adjusted basis is included as an AMT tax preference item.
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The credit for prior year AMT liability may be carried:
The credit for prior year AMT liability may be carried:
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Like capital losses for individuals, AMT credits may be carried forward indefinitely for individual taxpayers.
Like capital losses for individuals, AMT credits may be carried forward indefinitely for individual taxpayers.
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