- (TCO 3) Mr. and Mrs. Drake were separated for the last 2 months of last year. During separation, Mr. Drake passed away. Which of the following is Mrs. Drake’s filing status for the year?
- (TCO 3) Under the current law, the child tax credit is refundable to all families with children _____.
- (TCO 4) Corey, a master's degree candidate at Blane University, was awarded an $11,000 scholarship from Blane in Year 8. The scholarship was used to pay Corey’s Year 8 university tuition and fees. Also in Year 8, Corey eceived $9,200 for teaching two courses at a nearby college. What amount is includable in Corey’s Year 8 gross income?
- (TCO 3) Ben and Marlee met at a New Year's Eve party held December 31, Year 1. They instantly bonded, fell madly in love, and were married at 11:38 p.m. that night. Identify the couple’s filing status for Year 1.
- (TCO 3) Edwina, a single taxpayer, received $176,000 in salary, $30,000 in income from an S corporation in which she did not materially participate, and a $55,000 passive loss from a real estate rental activity in which she materially participated. Edwina’s modified adjusted gross income was $165,000. What amount of the real estate rental activity loss was deductible?
- (TCO 4) In a tax year where the taxpayer pays qualified education expenses, interest income on the redemption of qualified U.S. Series EE Bonds may be excluded from gross income. The exclusion is subject to a modified gross income limitation and a limit of aggregate bond proceeds in excess of qualified higher education expenses. Which of the following is (are) true?
I. The exclusion applies for education expenses incurred by the taxpayer, the taxpayer's spouse, or any person whom the taxpayer may claim as a dependent for the year.
II. "Otherwise qualified higher education expenses" must be reduced by qualified scholarships includible in gross income.
- (TCO 4) Steven is 23 and his annual compensation is $200,000. What is the maximum amount that Steven may contribute to a Section 401(k) plan on his behalf in 2015?
- (TCO 2) Janet and Ted have two children, Mary (age 10) and Seth (age 12). Janet's Aunt Martha resides with the family in an apartment over the garage. Martha's only income is $1,500 a month in Social Security benefits. Janet and Ted receive no rent payments from Martha and provide all remaining support for her living arrangements. How many exemptions are Janet and Ted entitled to in filing their joint tax return?
- (TCO 5) Real property taxes on undeveloped land are considered a(n) _____
- (TCO 5) The appreciation on undeveloped land that is being held for investment is _____.
- (TCO 3) During 2015, John, a single taxpayer, 41 years old, had Schedule C income of $90,000. His self-employment tax was $8,000. He also had itemized deductions of $4,000. What is Erik's AGI? What is Erik's taxable income?
- (TCO 5) Edward owns and manages an apartment building. This is Edwards’s only passive activity. The building generated a loss of $59,000 for the current year. Before deduction of the loss, Edward’s AGI was $85,000. Can Edward deduct the entire loss in the current year? If Edward cannot deduct the full amount of the loss, indicate the amount he can take and how much loss he can carry forward.
- (TCO 4) What is a fringe benefit? Provide at least one example and explain how it is treated for tax purposes.
- (TCO 1) Describe the types of state taxes that an individual or organization is likely to pay. How can a state operate if it doesn’t have state sales taxes?