Individual Taxation

Question 1

Under an ESPP, the option exercise price may not be less than the lesser of what % of the FMV of the stock when granted or exercise?

Answer 1

85% of the FMV

Question 2

Under an ESPP, the option cannot be exercised more than how many months after the grant date?

Answer 2

more than 27 months

Question 3

Child and Dependent Care Credit is only available for children under what age?

Answer 3

Under 13 years old

Question 4

What is the maximum eligible amount per dependent for the Child and Dependent Care Credit?

Answer 4

$3,000 per dependent

Question 5

There is no penalty for underpayment of estimated taxes, provided the taxes due after withholdings were not over what amount?

Answer 5

$1,000

Question 6

At what % of AGI should be deducted to determine the deductible medical expenses?

Answer 6

7.5% of AGI

Question 7

A qualified appraisal for real property donations is not required to be attached to the tax return unless the property value exceeds what amount?

Answer 7

$5,000

Question 8

The charitable contribution deduction for long-term appreciated stock is limited to how many % of AGI

Answer 8

30% of AGI

Question 9

The starting point in the calculation of casualty loss is the lesser of which two amounts?

Answer 9

Lesser of adjusted basis
OR
Decrease in FMV

Question 10

The AGI adjustment for education loan interest is limited to the the lower of which two amounts?

Answer 10

Lower of
Amount Paid
OR
$2,500

Question 11

If TP actively participates in the rental real estate activities, PAL can be deductive against nonpassive sources up to what amount?

Answer 11

$25,000

Question 12

PAL can only be deducted against income from passive sources at all times: TRUE or FALSE?

Answer 12

FALSE.

Except when TP actively participates in the rental real estate activities.

Question 13

Capital gain property given to a public charity is limited to how many % of AGI?

Answer 13

30% of AGI

Question 14

Capital gain property is deductible as a charitable contribution at what value? Tax basis or FMV?

Answer 14

FMV

Question 15

How much is the additional standard deduction for TP aged 65 or older?

Answer 15

$1,300

Question 16

Charitable contributions subject to what % may be carried forward for how many years?

Answer 16

60% limit

5 years C/F

Question 17

For SEP IRA plans, earned income is defined as net self-employment earnings reduced by what?

Answer 17

Reduced by 1/2 of the self-employment tax

Question 18

A Medicare tax at what percent is levied on the lesser of 1) the TP’s net investment income, OR 2) excess of modified AGI over a threshold amount?

Answer 18

3.8% Medicare tax

Question 19

To avoid the penalty for the underpayment of estimated tax, what % of current tax or % of PY’s tax must be paid in four equal installments?

Answer 19

90% of CY tax
OR
100% of PY tax

Question 20

The child tax credit is available fully for taxpayers with AGI up to what amount for a joint return (2020)?

Answer 20

$400,000

Question 21

The child tax credit is available for TP with eligible children under what age?

Answer 21

17 years of age

Question 22

How much is the child tax credit for each eligible child?

Answer 22

$2,000

Question 23

AMT Credit can be C/F for how long?

Answer 23

Indefinitely

Question 24

The rule limiting the allowability of passive activity losses and credits applies to:
A. C Corporations
B. Partnerships
C. Personal service corporations
D. S Corporations

Answer 24

C. Personal service corporations

Question 25

When it comes to S Corporations, the “at risk” rules apply at the shareholder and corporate level: TRUE or FALSE?

Answer 25

FALSE. Applies at the shareholder level rather than the corporate level.

Question 26

Under thie “Mom & Pop” exception, up to what amount of passive losses and the deduction equivalent of tax credits that are attributable to rental real estate may be used as an offset against income from nonpassive sources?

Answer 26

$25,000

Question 27

Tax rules allow suspended passive losses to be carried forward, but not back, until utilized: TRUE or FALSE

Answer 27

TRUE

Question 28

The uniform capitalization rules do not apply to inventory acquired for resale if the taxpayer’s average gross receipts for the preceding three tax years do not exceed what amount?

Answer 28

$26,000,000

Question 29

The maximum annual deductible amount for self-employed individuals to a Keogh Plan is the lesser of?

Answer 29

$57,000 or 20 percent of net earnings

Question 30

Under the “Mom & Pop” exception for PAL deductibility, the allowance is reduced by 50% of the MAGI excess over what amount?

Answer 30

$100,000

Question 31

Couples filing a joint return can contribute and deduct up to what amount to an IRA provided at least one spouse is an active participant in a retirement plan?

Answer 31

$6,000 for each ($12,000 for both)

Question 32

If the taxpayer had adjusted gross income in excess of $150,000 in the prior year, what % of the prior year’s tax liability is used to compute the safe harbor for estimated payments?

Answer 32

110%

Question 33

The maximum annual deductible amount for self-employed individuals to a Keogh Plan (SEP IRA deduction) is the lesser of what amount or % of net earnings?

Answer 33

Lesser of
$57,000
or 20% of net earnings

Question 34

The employee receiving a nonqualified stock option must recognize as capital gain the value of the option if traded on an established market: TRUE or FALSE

Answer 34

FALSE.

Recognize as ordinary income

Question 35

Noninterest investment expenses are deductible: TRUE or FALSE

Answer 35

FALSE.

Nondeductible

Question 36

Ordinary income reported from an S corp is subject to self-employment tax: TRUE or FALSE

Answer 36

FALSE. Not subject to self-employment tax. But guaranteed payments are

Question 37

Ordinary income reported from a partnership is subject to self-employment tax for both limited and general partners: TRUE or FALSE

Answer 37

FALSE. Subject to self-employment tax for a general partner only.

Question 38

Which of the following is not a refundable tax credit?
A. Excess social security paid
B. Retirement savings contribution credit
C. Child tax credit
D. Earned income credit

Answer 38

B. Retirement savings contribution credit