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IRS Enrolled Agent Exam Unit 5 Questions and Answers
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IRS Enrolled Agent Exam Unit 5 Questions and Answers
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IRS Enrolled Agent Exam Unit 5Questions and Answers
A gtaxpayer gmust ggenerally ghave gheld gstock gfor g_____ gin gorder gfor ghis gdividend
gincome gto gbe gconsidered gfor gqualified gdividends.
A. gMore gthan g30 gdays gduring gthe g121-day gperiod gthat gbegins g60 gdays gbefore gthe
gex-dividend gdate. g
B. gMore gthan g60 gdays gduring gthe g121-day gperiod gthat gbegins g60 gdays gbefore gthe
gex-dividend gdate. g
C. gMore gthan g120 gdays.
D. gMore gthan gone gyear. g- gCorrect gAnswers g-B. gA gtaxpayer gmust ggenerally ghave
gheld gstock gfor gmore gthan g60 gdays gduring gthe g121-day gperiod gthat gbegins g60
gdays gbefore gthe gex-dividend gdate. gThe gex-dividend gdate gis gthe gdate gfollowing gthe
gdeclaration gof ga gdividend. gWhen gfiguring gthe gholding gperiod gfor gqualified
gdividends, gthe gtaxpayer gmay gcount gthe gnumber gof gdays ghe gheld gthe gstock gand
ginclude gthe gday ghe gdisposed gof gthe gstock. gThe gdate gthe gtaxpayer gacquires gthe
gstock gis gnot gincluded gin gthe gholding gperiod. gA glonger gholding gperiod gmay gapply
gfor gdividends gpaid gon gpreferred gstock.
Which gof gthe gfollowing gdividends gare greported gas ginterest gincome gon ga gtaxpayer's
greturn?
A. gStock gdividends
B. gDividends gearned gon gdeposits gin gcredit gunions. g
C. gPreferred gdividends
D. gQualified gdividends g- gCorrect gAnswers g-B. gThe gdividends gearned gon gdeposits
gin gcredit gunions gare greported gand gtaxed gas ginterest gincome.
Six gyears gago, gDerrick gbought ga gUS gSeries gEE gsavings gbond gand gdecided gto
greport gthe ginterest gearned geach gyear guntil gmaturity. gThis gyear, ghe gbought ganother
gSeries gEE gsavings gbond. gHow gshould gDerrick greport gthe ginterest gon gthis gnew
gbond?
A. gHe gmust gwait guntil gthe gsecond gbond gmatures gto greport gall gthe ginterest gearned
gat gthat gtime.
B. gHe gmust greport gthe ginterest gearned, gas glong gas ghe gmakes gthe gelection gon ga
gtimely gfiled greturn. g
C. gHe gcan guse geither gmethod gto greport ginterest gearned, gas glong gas ghe gmakes
gthe gelection gon ga gtimely gfiled greturn.
, D. gThis gtype gof ginterest gis gnow gexempt gfrom gfederal gincome gtax. g- gCorrect
gAnswers g-B. gSavings gbond gowners gmust guse gthe gsame ginterest-reporting gmethod
gfor gall gthe gSeries gEE gand gSeries gI gbonds gthey gown.
Alec greceived ga gForm g1099-DIV gfrom ghis gbrokerage gfirm gshowing gthat ghe gearned
g$1,200 gof gordinary gdividends gin g2015. gHow gshould gthis gincome gbe ghandled gon
gAlec's gtax greturn?
A. gHe gmust greport gthe gdividend gincome gon gSchedule gB, gbut git gis gnot gtaxable. g
B. gHe gmust greport gthe gdividend gincome gon gSchedule gB. gIt gis gtaxable gas gordinary
gincome. g
C. gHe gcan greport gthe gdividend gincome gon gpage gone gof ghis gForm g1040. gIt gis
gtaxable gas gordinary gincome. g
D. gHE gdoes gnot ghave gto greport gthe gdividend gincome guntil ghe gsells gthe gstock gfrom
gthe gcorporations gthat gdistributed gthe gdividends. g- gCorrect gAnswers g-C. gOrdinary
gdividends gare gtaxable gas gordinary gincome gin gthe gyear gthey gare gearned. gOnly
gamounts gover g$1,500 gmust gbe greported gon gSchedule gB, gso gAlec gcan greport gthe
g$1,200 gof gdividend gincome gdirectly gon gpage gone gof ghis gForm g1040.
In g2015, gRemy ghad gthe gfollowing gtransactions gfrom gwhich gshe gearned ginterest:
*Interest gof g$700 gfrom ga gcertificate gof gdeposit gthat gmatured gin gSeptember. g
*Upon gmaturity gof gthe gfirst gCD, gshe ginvested gthe gproceeds gin ga gsecond gcertificate
gwith ga gmaturity gin gMarch g2016. gAs gof gDecember g31, g2015, gthis gcertificate ghad
gaccrued ginterest gof g$400. g
*She gloaned g$2,000 gto ga gfamily gmember gwho grepaid gthe gloan gand grelated
ginterest gof g$120 gwith ga gcheck gdated gDecember g31, g2015, gwhich gRemy greceived
gon gJanuary g4, g2016. g
What gis gthe gamount gof gtaxable ginterest gincome gthat gRemy gmust greport gfor g2015?
A. g$1,100
B. g$1,220
C. g$820
D. g$700 g- gCorrect gAnswers g-D. gThe ginterest gearned gon gthe gfirst gcertificate gwas
greceived gupon gmaturity, gand gwas gtherefore gtaxable gin g2015. gThe gaccrued ginterest
gon gthe gsecond gcertificate gwould ghave gbeen gsubject gto gpenalty gif gthe gcertificate
ghad gbeen gredeemed gprior gto gmaturity, gand gthe gaccrued ginterest gwas gtherefore
gnot gtaxable. gRemy gdid gnot ghave gconstructive greceipt gof gthe ginterest gpaid gon gthe
gloan guntil g2016, gand gso git gwas gnot gtaxable gin g2015.
Nondividend gdistributions gare:
A. gConsidered ga greturn gof gcapital
B. gNever gtaxable
C. gAlways gtaxable gas gordinary gincome
D. gBoth gA gand gB g- gCorrect gAnswers g-A. gNondividend gdistributions gare gnot gpaid
gout gof ga gcorporation's gearnings gand gprofits. gThey gare gconsidered ga grecovery gor
greturn gof gcapital gand gtherefore gare ggenerally gnot gtaxable. gHowever, gthese
gdistributions greduce gthe gtaxpayer's gbasis. gOnce gbasis gis greduced gto gzero, gany
gadditional gdistributions gare gtaxed gas gcapital ggains.
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