Income Tax

Question 1

IRC Internal Revenue Code

Answer 1

primary source of all tax law

Question 2

treasury regulations

Answer 2

great authority, but not law

Question 3

revenue rulings and revenue procedures

Answer 3

administrative interpretation
may be cited

Question 4

congressional committee reports

Answer 4

indicate intent of congress
may not be cited

Question 5

Private letter rulings

Answer 5

apply to specific taxpayer

Question 6

judicial sources

Answer 6

court decisions interpret

Question 7

self employment tax

Answer 7

taxable wage base will never be over 160,200
SS tax stops at 160,200

Question 8

frivolous Return

Answer 8

5,000

Question 9

negligence

Answer 9

20% of portion of underpayment

Question 10

civil fraud

Answer 10

75% of portion of the tax underpayment

Question 11

failure to file

Answer 11

5% of the tax due per month
max 25%

Question 12

failure to pay

Answer 12

.5% per moth
max 25%

Question 13

Itemized Deductions - Unreimbursed medical and dental

Answer 13

Anything over 7.5% AGI not reimbursed

Question 14

Itemized deductions - taxes you paid

Answer 14

SALT state and local taxes $10,000 limit

Question 15

Itemized deductions - interest you paid

Answer 15

Mortgage interest on up to $750,000 of debt $375,000 filing separate

• primary
• secondary

Must be used for home improvement buying or building

Question 16

Intermixed deductions gifts to charity

Answer 16

Limited to 60% AGI
Must be qualified charity
Private and public have different tax deductions

Question 17

Itemized Deductions Casualty and left losses

Answer 17

Must be federally declared disaster
Lessor of FMV or basis
- insurance payment
- $100 deductible
-10% AGI

Question 18

Itemized deductions

Answer 18

Schedule A

Unreimbursed medical expenses
Taxes you paid SALT
Interest paid on mortgage