ARE- Fed Taxes- Individuals

Question 1

IS ALIMONY TAXABLE

Answer 1

YES ( CHILD SUPPORT PAYMENTS ARE NOT)

Question 2

IS UNEMPLOYMENT COMPENSATION TAXABLE

Answer 2

YES

Question 3

what is the maximum amount of social security benefits that may be taxed

Answer 3

85%

Question 4

may gambling winnings be netted against gambling losses

Answer 4

NO winnings are reported on form 1040 losses are reported on Schedule A ( miscellaneous deductions not subject to 2%)

Question 5

If you remit your jury duty pay to your employer how should the pay be treated

Answer 5

included as income and deducted to arrive at AGI

Question 6

Is a tax refund from a local government taxable if the federal standard deduction was taken in the year from which the refund stems

Answer 6

NO ( only if the itemized deduction was taken and subject to the tax-benefit rule.)

Question 7

If you chose to receive a stock dividend instead of cash, is the dividend taxable?

Answer 7

Yes, (if there was no choice, stock dividends are not taxable)

Question 8

Are lump-sum life insurance proceeds taxable

Answer 8

No

Question 9

are punitive damages taxable

Answer 9

Yes

Question 10

If an employer fully funded a pension, how much of the distribution is taxable

Answer 10

The full amount

Question 11

what are the requirements for a scholarship to be excluded from income

Answer 11

Matriculated (degree=Seeking) student

Money is used for tuition, books, and supplies

Question 12

how much tax-free life insurance may an employer provide to an employee

Answer 12

$50,000

Question 13

What are the requirements for Series EE Us Savings bon interest to be excluded?

Answer 13

Purchaser at least age 24
purchased after 1989
Proceeds used for higher education of self, spouse, dependents

Question 14

Is the rent generated from an inherited building taxable?

Answer 14

Yes ( but the receipt of the building is not taxable)

Question 15

Is employer-Provided educational assistance for graduate school generally taxable?

Answer 15

Yes ( there is a $5,250 exclusion for other -than-graduate-school education) check current regs??

Question 16

How much may be contributed to a regular IRA

Answer 16

the smaller of earned income (inclusive of alimony received or $2000) see current regulations

Question 17

What determines the deductibility of an IRA

Answer 17

Whether or not the taxpayer is covered by a pension plan ( and a possible AGI limitation)

Question 18

what passive activity loss ( subject to an AGI phase-out) may be used to offset non-passive activity income?

Answer 18

Rental real estate activity of an actively participating 10% owner

Question 19

What is the AGI floor for qualifying medical expenses?

Answer 19

Only what exceeds 10% of AGI 7.5% if either spouse is over 65

Question 20

What taxes are considered itemized deductions?

Answer 20

State and local income taxes
Real estate taxes
personal property taxes

Question 21

what interest payments are considered itemized deductions?

Answer 21

Mortgage interest (inclusive of points)
Investment interest (only used to offset net investment income)

Question 22

What is the AGI limit on contributions as an itemized deduction?

Answer 22

50% (except for long-term capital gain property, which is 30%)

Question 23

What is the carryover period for charitable contributions taken as itemized deductions?

Answer 23

5 years

Question 24

what is the general formula for casualty ant theft losses taken as an itemized deduction?

Answer 24

loss less insurance less $100 less 10% of AGI

Question 25

what is the limit on meals and entertainment before any AGI threshold?

Answer 25

50%

Question 26

What is a capital asset?

Answer 26

Any property held for personal or investment purposes ( other than inventory, receivables, and certain types of assets eligible for Section 1231 treatment)

Question 27

In a like-kind exchange, what amount of gain is taxable?

Answer 27

Only gain to the extent of "boot" (cash and other property received, and liabilities assumed by the other side)

Question 28

What is the holding period for property acquired from a decedent?

Answer 28

Always long-term

Question 29

What is the maximum exclusion for a married couple who sell their residence after May 6, 1997?

Answer 29

$500,000

Question 30

True or False? | In-Laws are not related parties: therefore, a loss on the sale of property to an in-law is deductible.

Answer 30

True

Question 31

True or False? | Property held for lease to others is 1231 property?

Answer 31

True

Question 32

What is the maximum amount of an individual's capital losses that may be offset against ordinary income?

Answer 32

$3000 $1500 if you're married filing separate return. You can use your total net losses to reduce income dollar for dollar up to 3000

Question 33

What are the five tests of dependency?

Answer 33

1. Gross income 2. Support 3. Relationship 4. Citizenship 5. No joint return

Question 34

How long may Qualifying widow(er) status be used?

Answer 34

For the two years after spouse's death

Question 35

Who are entitled to increased standard deductions?

Answer 35

Persons who are legally blind, or 65 or older ( and who do not itemize deductions)

Question 36

True or False? | Earned income credit is refundable.

Answer 36

True

Question 37

True or False? | Alternative minimum tax (ATM) is a substitute for regular tax.

Answer 37

False | it is in addition to regular tax

Question 38

True or False? | Excess social security withheld by one employer may be claimed as a credit on the tax return.

Answer 38

False | the employee must request that employer return the excess

Question 39

What amount of adoption assistance credit is generally available?

Answer 39

$5000. $12970 in 2013 for qualified expenses

Question 40

What is the minimum tax credit used to offset?

Answer 40

Future regular tax liability