- Study guides, Class notes & Summaries

Federal Tax Exam 2 ACTUAL Exam Questions and CORRECT Answers Which of the following corporations is an includible corporation for purposes of filing a consolidated tax return? insurance companies S corporations car manufacturing corporation

Federal Taxation - Exam 2 (ALL) UPDATED ACTUAL Exam Questions and CORRECT Answers Which taxpayers have limits on their/receive no standard deduction? - CORRECT ANSWER - married taxpayers filing separate where the other spouse itemizes, non-resident aliens, and taxpayers with filing periods less than 12 months

Federal Taxation - Exam 2 UPDATED ACTUAL Exam Questions and CORRECT Answers Gross Income Definition - CORRECT ANSWER - All income from whatever source derived Formula to Calculate Gross Income - CORRECT ANSWER - Total Income -Exclusions from Income =Gross Taxable Income

Federal Taxation - Exam 2 UPDATED Exam Questions and CORRECT Answers Other terms for self-employed taxpayer are: - CORRECT ANSWER - Independent contractor, entrepreneur or proprietor Self employed taxpayers report their profit/loss on: - CORRECT ANSWER - Sch C or Sch F for farmers

Chapter 1 - An Overview of Federal Taxation UPDATED Exam Questions and CORRECT Answers Tax - CORRECT ANSWER - enforced, involuntary contribution required and determined by law to provide revenue for public & government purposes with no specific benefits or services received purpose of a tax - CORRECT ANSWER - revenue

Chapter 1 - An Overview of Federal Taxation ACTUAL Exam Questions and CORRECT Answers Adjusted Gross Income (AGI) - CORRECT ANSWER - the amount of income remaining after subtracting all allowable adjustments to income from gross income ad valorem taxes - CORRECT ANSWER - property tax

Ethics: Federal tax practice and procedures UPDATED Exam Questions and CORRECT Answers Underpayments and penalties - CORRECT ANSWER - 20% penalty on the following underpayments: 1. Underpayments attributable to negligence or disregard of rules or regulations 2. Substantial understatement of income tax. This amount is offset by amounts for which the tax treatment is adequately disclosed and there is a reasonable basis (≥20% chance of being sustained) for the tax treatment. Or ther...

Ethics, Professional Responsibilities and Federal Tax Procedures UPDATED Exam Questions and CORRECT Answers Who is a tax return preparer (TRP)? - CORRECT ANSWER - any person who prepares for compensation, or who employs one or more persons to prepare for compensation, all or a substantial portion of any return of tax or any claims for refund of tax (This provision covers not only federal income tax returns but also federal estate and gift tax returns, employment tax returns, and exci...

Federal Income Taxation Exam 2 MC Review UPDATED ACTUAL Exam Questions and CORRECT Answers Qualifying property received in a nontaxable exchange has a cost basis for tax purposes. a. True b. False - CORRECT ANSWER - b. False Qualifying property takes a substituted basis.

Intro to Federal Tax Exam 2 UPDATED ACTUAL Exam Questions and CORRECT Answers Gross income - CORRECT ANSWER - gross income consist primarily of revenues from the sale of goods or performance of services in the regular course of commercial activity. (T or F) The Internal Revenue Code allows a deduction for all the ordinary and necessary expenses paid or incurred during the taxable year in carrying on any trade or bussiness. - CORRECT ANSWER - True