In a tax year where the tax payer 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 limit of aggregat
Both
Which of the following conditions must be present in a divorce agreement executed on or before December 31, 2018, for a payment to qualify as deductible alimony?
I. Payments must be in cash or its equivalent
II. the payments must end at the recipient's de
Both
With regard to the inclusion of Social Security benefits in gross income, for the year 8 tax year, which of the following stataments is correct?
a. 85% of SS benefits is max amount of benefits to be included in gross income.
b. the SS benefits in excess o
a. 85% of SS benefits is max amount of benefits to be included in gross income.
Clark bought series EE US savings bonds after 1989. Redemption proceeds bonds ill be used for paymt of college tuition for his child. One of the conditions that mus be met for tax exemption of accumulated interest on these bonds is that:
a. bonds must be
b. purchaser of the bonds must be the sole owner of the bonds or joint owner with spouse.
For a cash basis taxpayer, gain or loss on a year-end sale of listed stock arises on the:
a. date of delivery of the stock certificate
b. settlement date
c. date of receipt of cash proceeds.
d. trade date
d. trade date
Sanders has made deductible contributions to his traditional IRA for many years. Sanders recently retired at the age of 60 and received a distributions of $150K. in which way, if any will the distribution be taxed?
a. it will not be taxed
b as ordinary in
b. as ordinary income
as a result of a divorce settled in 2016, a taxpayer received the following during the current year:
Cash from the property settlement - 100k
child support - 12k
alimony payments - 30k
what amount, if any, must be included in gross income for the current
c. 30k
charlie and maria are married cash- basis taxpayers. In yr 8, they had interest income as follows:
- 500 interest on federal income tax refund
- 600 interest on state income tax refund
- 800 interest on federal gov obligations
- 1000 int. on state gov obl
1900
Flower, a married taxpayer, purchased an annuity for 64,400 that will pay $700 per month over the life of flower and his spouse. At the time of purchase, the couple's joint life expectancy was 23 years. flower's received payment beginning April 1 amountin
a. 4,200
23 *12 = 276 months expectancy
64,400/276 = $233 per month
april to december = 9 months
9 x 233.33 = 2,100
6,300 - 2,100 = 4,200 id taxable
a 33 year old tax payer withdrew $30K from a traditional IRA. The tax payer has a 33% effective tax rate and a 35% marginal tax rate. What is the total tax liability associated with the withdrawl?
a. 13k
b. 10k
c. 10.5
d. 13.5
Any amount take before the age of 59 1/2 there is a 10% penalty tax in addition to the regular tax.
Regular
30,000 x 30% = 10,500
Penalty
30,000 x 10% = 3,000
Totaal = 13,500
Jay worked for ABC and earned a salary of $100K. Johnson also received, as a fringe benefits, group term-life insurance twice johnson's salary. Assume the annual IRS-established uniform cost of insurance is 2.76 per $1,000. what amount should he include i
150 is the excess he receives.
so 150*276 = 414
so 100,000 +414 = 100,414
a painter and an accountant agree to trade their services. The painter provides services valued at $550, and the accountant provides services worth $500. what amount should the accountant report as income or expense?
a. 550 income
b. 50 expense
c. 500 inc
A. 550 income, in the case of noncash income, the amount of income to be reported is the FMV of the property or services received/
M4
Which of the following is considered a specified service trade or business (SSTB) for purposes of the qualifying business income deduction?
a. accounting firm
b. manufacturing company
c. architectural services
d. engineering firm
a. accounting firm
accounting services are considered an SSTB for purposes of the qualified business income deduction.
M4
which of the following is true about the qualifying business income (QBI) deduction for taxpayers with taxable income above the taxable income limitations?
a. the tax payer is specified service trade or business (SSTB), W-2 wage and property limitation
b. if the tax payer is a specified service trade or business (SSTB), no QBI deduction is allowed.
For a specified service trade of business (SSTB) over the taxable income limitations, no QBI deduction is allowed.
Which of the following is the overall limitation to the qualifying business income (QBI) deduction?
a. Lesser of 50% of combined QBI or 20% of the taxpayer's taxable income in excess of net capital gain
b. Taxable income limitations based on filing status
a. Lesser of 50% of combined QBI or 20% of the taxpayer's taxable income in excess of net capital gain
Aston and Bee are equal partners in AB partnership. In the tax year, the ordinary income of the partnership is $20,000, and the partnership has a long-term capital gain of $12,000. Aston's basis in AB was $40,000, and he received distributions of $5,000 d
10
50% of 20,000
The term active participation for a passive activity loss is relevant in relation to ...
a. rental real estate activities.
b. passive activities in which the taxpayer materially participates.
c. passive activities in which the taxpayer does not materially
Rental real estate activities
allows the taxpayer to deduct losses from the rental activities against other income, subject to a limitation.
The rule limiting the allowability of passive activity losses and credits applies to ...
a. widely held c corps
b. partnerships
c. s corp
d. Personal service corp
personal service corp
James co. issued stock options to employees under an employee stock purchase plan. Which of the following statements is correct?
I. the option exercise price may not be less than the lesser of 95% of the FMV of the stock when granter or exercised.
II. the
II only.