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Exam 3: Preparing Your Taxes

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Question 51

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One's home must typically be owned at least three years to receive the most favorable capital gains treatment.

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Question 52

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Which of the following can be adjustment(s) to gross income on the 1040 form?

A) Health insurance premiums paid by self-employed individuals
B) Alimony paid
C) Moving expenses
D) a and b only
E) a,b,and c

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Question 53

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Choose the word or phrase in [ ] which will correctly complete the statement.Select "a" for the first item,"b" for the second item,and "c" if neither item will correctly complete the statement. -You will have to list and be able to prove [standard | itemized] deductions if audited.

Itemized non-business expenses do not include:

The income shifting tax strategy is least effective when income producing gifts are given to persons:

You have up to three years after filing your tax return to file an amended tax return (1040X).

An investment must be owned over 12 months in order to qualify for 0 percent tax on capital gains.

Tax practitioners that are federally licensed are called:

One's marginal tax rate is typically lower than one's average tax rate.

Adjustments to gross income will decrease your taxable income.

Choose the word or phrase in [ ] which will correctly complete the statement.Select "a" for the first item,"b" for the second item,and "c" if neither item will correctly complete the statement. -Your income tax filing status is determined primarily by your [income | marital] status.

The AMT includes in taxable income certain types of deductions otherwise allowed,such as state and local income and property taxes.

Tax credits are dollar-for-dollar reductions in taxable income.

Choose the word or phrase in [ ] which will correctly complete the statement.Select "a" for the first item,"b" for the second item,and "c" if neither item will correctly complete the statement. -Interest you paid on your [vacation home | consumer] loan could be deducted.

George has the following expenses that he wants to include as itemized deductions for the year.His adjusted gross income is $60,000.What is the total itemized deduction he can take?

There is no limit on the amount of Social Security component of FICA withheld annually.

If you are eligible to receive a tax refund,you will have to file a tax return to get the refund.

By filing a tax extension,one does not have to pay his income tax liability until August 15.

You are more likely to have your tax return audited if you work for a for-profit company,compared to a non-profit organization.

The total amount that you owe for income tax in one year is your tax: