Navigation » List of Schools » Glendale Community College » Accounting » Accounting 150 – Principles of Income Taxation » Fall 2021 » Final Exam
Below are the questions for the exam with the choices of answers:
Question #1
A TRUE
B FALSE
Question #2
A $17,241
B $10,562
C $11,800
D $12,053
Question #3
A FALSE
B TRUE
Question #4
A FALSE
B TRUE
Question #5
In 2020, Campbell, a single taxpayer, has $95,000 of profits (net of the deduction for self-employment taxes, the self-employed health insurance deduction, and the deduction for contributions to qualified self-employment retirement plans) from her general store, which she operates as a sole proprietorship. She has no employees, $40,000 of qualified property, and $50,000 of taxable income before the deduction for qualified business income. How much is Campbell’s deduction for qualified business income?
A $10,000.
B $8,000.
C $95,000.
D $19,000.
E $0.
Question #6
A $5,200.
B $570.
C $0 (Full-time students are not allowed to participate in IRAs).
D $6,000.
Question #7
A TRUE
B FALSE
Question #8
A Distributions from defined benefit plans are partially taxable as capital gains and partially nontaxable as a return of capital.
B Distributions from defined benefit plans are fully taxable as ordinary income.
C Distributions from defined benefit plans are partially taxable as ordinary income and partially nontaxable as a return of capital.
D Distributions from defined benefit plans are fully taxable as capital gains.
Question #9
A $5,000
B $5,250
C None of the choices are correct.
D $4,750
E $4,500
Question #10
A TRUE
B FALSE
Question #11
A $0.
B $415.
C $72,715.
D $72,300.
Question #12
A TRUE
B FALSE
Question #13
A income shifting.
B tax avoidance.
C tax evasion.
D None of the choices are correct.
E conversion.
Question #14
A 9.23 percent
B 6.10 percent
C 9.20 percent
D 22.00 percent
E 7.20 percent
Question #15
A None of the choices are correct.
B $23,000
C $20,790
D $25,300
E $18,998
Question #16
A TRUE
B FALSE
Question #17
A FALSE
B TRUE
Question #18
A 12.00 percent
B None of the choices are correct.
C 15.51 percent
D 11.34 percent
E 13.06 percent
Question #19
A FALSE
B TRUE
Question #20
A FALSE
B TRUE
Question #21
A TRUE
B FALSE
Question #22
A $53,594
B $46,861
C $48,722
D $51,547
Question #23
A Refundable, nonrefundable personal, business
B Nonrefundable personal, business, refundable
C Refundable, business, nonrefundable personal
D Business, nonrefundable personal, refundable
Question #24
A $10,562
B $17,260
C $11,800
D $12,072
Question #25
A FALSE
B TRUE
Question #26
A $14,050.
B $18,650.
C $19,950.
D $20,300.
E $12,400.
Question #27
Margaret Lindley paid $15,000 of interest on her $300,000 acquisition debt for her home (fair market value of $500,000), $4,000 of interest on her $30,000 home-equity debt, $1,000 of credit card interest, and $3,000 of margin interest for the purchase of stock. Assume that Margaret Lindley has $10,000 of interest income this year and no investment expenses. How much of the interest expense may she deduct this year?
A $23,000.
B None of the choices are correct.
C $19,000.
D $18,000.
E $22,000.
Question #28
A None of the choices are true.
B A taxpayer who incurs acquisition indebtedness in 2018 may only deduct interest on up to $750,000 of home acquisition indebtedness.
C Taxpayers may deduct interest on up to $1,000,000 of home-equity debt.
D Taxpayers may only deduct interest on up to $1,500,000 of home acquisition indebtedness.
E The deduction for investment interest expense is not subject to limitation.
Question #29
A Even if Norma has no other itemized deductions, she should claim the standard deduction.
B Norma can deduct $9,500 of state income taxes as a for AGI deduction.
C Norma can deduct $11,200 of real estate taxes as an itemized deduction.
D None of the choices are correct.
E Norma can deduct $10,000 of taxes as an itemized deduction.
Question #30
A Real estate taxes on a residence.
B Gasoline taxes on personal travel.
C None of the choices qualify as an itemized deduction.
D Personal property taxes assessed on the value of specific property.
E State, local, and foreign income taxes.
Question #31
A Medical expenses incurred to prevent disease.
B Medical expenses reimbursed by health insurance.
C The cost of prescription medicine and over-the-counter drugs.
D None of the costs are deductible.
E The cost of elective cosmetic surgery.
Question #32
A The tools and supplies are an itemized deduction but the health insurance is deductible for AGI.
B Neither of the expenditures is deductible.
C Both expenditures are deductible for AGI.
D The tools and supplies are deductible for AGI while the health insurance is an itemized deduction.
E Both expenditures are itemized deductions.
Question #33
A $0
B $5,000
C $50,000
D $30,000
Question #34
A Taxpayers with high income are not allowed to contribute to traditional IRAs.
B A single taxpayer with no earned income is not allowed to deduct contributions to traditional IRAs.
C Once a taxpayer reaches 55 years of age she is allowed to contribute an additional $1,000 a year.
D Taxpayers who participate in an employer-sponsored retirement plan are allowed to deduct contributions to a traditional IRA regardless of their AGI.
Question #35
A $4,500
B $0 (Full-time students are not allowed to participate in IRAs)
C $500
D $6,000
Question #36
A Harriet’s deductible expenses are not limited to the amount of gross rental income from the property.
B Harriet is required to allocate all expenses associated with the home to rental use or personal use.
C Harriet is required to include all of the rental receipts in gross income.
D Harriet will be allowed to deduct all of the mortgage interest on the loan secured by the property.
Question #37
A TRUE
B FALSE
Question #38
A Shauna is 58 years of age but not yet retired when she receives the distribution.
B Shauna is 69 years of age but not yet retired when she receives the distribution.
C Shauna is 60 years of age but not yet retired when she receives the distribution.
D Shauna is 56 years of age and retired when she receives the distribution.
Question #39
A Janine recognizes $200 of imputed compensation income.
B Janine’s employer recognizes $200 of deductible interest expense.
C None of the choices are correct.
D Janine recognizes $200 of taxable interest income.
E Janine recognizes $200 of imputed dividend income.
Question #40
A $255,000
B $250,000
C $258,500
D Zero
E $260,000
Question #41
A $9,000.
B $6,000.
C $15,000.
D $16,200.
Question #42
A A loss is realized when stock options lapse.
B The bargain element on a nonqualified option is taxed to employees at capital gain rates.
C There is typically no tax effect on the grant date.
D Income recognized on the exercise date is greater for incentive stock options than nonqualified options.
Question #43
A the applicable standard deduction amount.
B the AGI threshold for reductions in certain tax benefits.
C the appropriate tax rate schedule or tax table.
D the top-stated marginal rate in the tax rate schedule.
Question #44
A No, Charlotte does not pass the gross income test.
B Yes, Charlotte is a qualifying relative of her parents.
C Yes, Charlotte is a qualifying child of her parents.
D No, Charlotte fails the support test for both qualifying children and qualifying relatives.
Question #45
A $3,000 taxes due.
B $1,000 tax refund.
C $5,000 taxes due.
D $1,000 taxes due.
Question #46
A Charitable contributions.
B Business expenses for a self-employed taxpayer.
C Contributions to qualified retirement accounts.
D Rental and royalty expenses.
Question #47
A $65,000.
B $60,000.
C $95,000.
D $90,000.
Question #48
A $0.
B $69,000.
C $69,425.
D $425.
Question #49
A Gross income ≥ adjusted gross income ≥ taxable income
B Gross income ≥ taxable income ≥ adjusted gross income
C Adjusted gross income ≥ gross income ≥ taxable income
D Adjusted gross income ≥ taxable income ≥ gross income
Question #50
A TRUE
B FALSE
Question #51
A 2.90 percent
B 22.00 percent
C 6.00 percent
D 4.00 percent
E 5.13 percent
Question #52
A causes income to be recognized after it is actually received.
B causes income to be recognized before it is actually received.
C is particularly restrictive for accrual-basis taxpayers.
D None of the choices are correct.
E applies equally to income and expenses.
Question #53
A $5,500
B None of the choices are correct.
C $18,775
D $25,000
E $4,131
Question #54
A $7,370
B $6,736
C None of the choices are correct.
D $8,000
E $8,720
Question #55
A None of the choices are correct.
B Federal Circuit
C 1st Circuit
D 2nd Circuit or the Federal Circuit
E 2nd Circuit
Question #56
A September 15th.
B None of the choices are correct.
C August 15th.
D October 15th.
E November 15th.
Question #57
A FALSE
B TRUE
Question #58
A TRUE
B FALSE
Question #59
A FALSE
B TRUE
Question #60
A 20.23 percent
B None of the choices are correct
C 22.00 percent
D 12.00 percent
E 15.63 percent
Question #61
A Convenience
B Certainty
C Economy
D Equity
E None of the choices are correct
Question #62
A Economy
B Convenience
C None of the choices are correct
D Certainty
E Equity
Question #63
A Proportional tax rate structure
B Regressive tax rate structure
C U.S. federal income tax
D Progressive tax rate structure
E None of the choices are correct
Question #64
A FALSE
B TRUE