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