Examet2etTaxetTestetQuestions
1. Jasmineetsoldetaetrentaletpropertyetofet$675,000etinettheetcurrentetyear.etSheethadetinitiallyetpurcha
sede t thee t propertye t fore t $500,000.e t Jasminee t replacede t thee t roofe t twoe t yearse t agoetforet$35,00
0etandetremodeledettheetkitchenetlastetyearetforet$25,000.etBeforeetlistingettheetrentaletpropertyetforet
sale,etJasmineethadettheetinsideetpaintedetforet$500etandettheetfenceetrepairedetforet$800.etAsetofetthe
etdateetofettheetsale,etaccumulated etdepreciationetwas
$63,500.etWhatetisetJasmine'setadjustedetbasisetinettheetrentaletproperty?
$500,000
$497,800
$496,500
$561,300:et $497,800
2. Whichetofettheetfollowingetisetanetordinaryetasset?etE
quipment
DeliveryettrucketAccou
ntsetReceivable
Computer:e t Accountset Receivable
3. Ife t Amos,e t agee t 15,e t receivese t $3,600e t ofe t dividende t incomee t ande t earnse t $4,800e t frome t aetpa
rt-timeetjob,etpartsetofethisetincomeetcanetbeettaxedetatetwhoseetrates?
Amos'set rate
BothetAmos'setrateetandetparents'etratee t Pare
nts'etrate
Trustetincomeettaxetrates:etBothetAmos'setrateetandetparents'etrate
4. InetIRCetSec.et179(b)(3)(A),etwhatetsubpartetiset(3)?etS
ubparagraph
ParagraphetSubsecti
onetSection:etParagraph
5. Whichetofettheetfollowingetisetanetexampleetofetrealty?etA
lletofetthese
ApartmentetStor
efrontetLand:etAllet
ofetthese
, Examet2etTaxetTestetQuestions
6. DaryletandetLindaetdivorcedettwoetyearsetago,etandetLindaetwasetgivenetcustodyetofettheiretson
,etThomas.etDuringettheetcurrentetyear,etDaryletprovidedet$8,000etofetThomas'setsupport,etandetL
indaetprovidedet$5,000.etWhichetofettheetfollowingetstatementsetisettrue?etDaryletmayetclaimetth
eetdependencyetexemptionetbecauseetheetprovidedetmoreetthanet50etpercentetofetThomas'setsupp
ortetifetLindaetcompletesettheetproperetformsettoetwaiveettheetdependencyetexemption.
IfetLindaetcompletesettheetproperetformsettoetwaiveettheetdependencyetexemptionetre-
etgardlesse t ofe t supporte t percentage,e t Daryle t makee t takee t thee t dependencye t exemption.etIf
e t Lindae t doese t note t completee t thee t propere t formse t toe t waivee t thee t dependencye t exemp-
ettion,etthenetsheetisetentitledettoettheetdependencyetexemption.
Alletofetthese:etDaryletandetLindaetdivorcedettwoetyearsetago,etandetLindaetwasetgivenetcustodyetofettheiretson,etThomas.etDuringettheetcurrentetyear,e
tDaryletprovidedet$8,000etofetThomas'setsupport,etandetLindaetprovidedet$5,000.etWhichetofettheetfollowingetstatementsetisettrue?
Daryletmayetclaimettheetdependencyetexemptionetbecauseetheetprovidedetmoreetthanet50etpercentetofetThomas'setsupportetifetLindaetcompleteset
theetproperetformsettoetwaiveettheetdependencyetexemption.
IfetLindaetcompletesettheetproperetformsettoetwaiveettheetdependencyetexemptionetregardlessetofetsupportetpercentage,etDaryletmakeettakeettheetde
pendencyetexemption.
IfetLindaetdoesetnotetcompleteettheetproperetformsettoetwaiveettheetdependencyetexemption,etthenetsheetisetentitledettoettheetdependencyetexemption.
Alletofetthese
7. Whichetofettheetfollowingetisetaetprimaryetauthority?et
Wileyettaxettextbook
IRSetPublicationetTax
etCourtetdecision
JournaletofetTaxationetarticle:etTaxetCourtetdecision
8. WhatetisettheetmaximumetpercentageetofetSocialetSecurityetbenefitsetreceivedetthatetcane t beettax
edetforetFederaletincomeettaxetpurposes?
0%
50%
85%
100%:et85%
, Examet2etTaxetTestetQuestions
9. Whichetofettheetfollowingetisetanetexampleetofetaetcompletelyetnon-taxableetfringeetben-
etefitetforetLori,etanetemployee etofetWORK,etInc.?etWORKetownsetaetdivision etthatetoperatesetanet
airlineetandetaetseparateetdivisionetthatetownsetvacationetresorts.etLorietworksetforettheetairlineetd
ivision.
Reimbursementetofet$225etforetheretsubscriptionettoetAiretTraveletBusinessetJournaletFreeetuse
etofetaetcompany-
ownedetvehicleetforetthreeetweeksetwhileetheretpersonaletcaretwasetbeingetrepairee
FreeetlodgingetatetaetresortetinetFloridaetwhenettheetresortethadetanetoccupancyetrateetofet65%
Groupettermetlifeetinsuranceetofet$200,000:etReimbursementetofet$225etforetheretsubscriptionettoetAiretTraveletBusinessetJo
nal
10. Whichetofettheetfollowingetisetconsideredetincomeetinetrespectetofetaetdecedent?etSala
ryetearnedetbutetnotetpaidetuntiletafteretdecedent'setdeath
Accruedetinterestetearnedetonetbondsetbutetnotetpaidetuntiletafterettheetdecedent'setdeathetDivide
ndetpaidetafteretdecedent'setdeathetforetwhichettheetrecordetdateetwasetbeforeettheetdecedent'setde
ath
Alletofettheseetareetconsideredetincomeetinetrespectetofetaetdecedent:etAlletofettheseetareetconsideredetincomeetinetr
espectetofetaetdecedent
11. Whichetofettheetfollowingetdoettheetdiscriminationetrulesetnotetapplyetto?etWo
rkingetconditionetfringeetbenefit
Thee t discriminatione t rulese t doe t note t applye t toe t anye t ofe t these.etT
ransportationetandetparkingetfringeetbenefit
Lodgingetonettheetemployer'setpremises:etTheetdiscriminationetrulesetdoetnotetapplyettoetanyetofetthese.
12. Whiche t ofe t thee t followinge t ise t ae t taxablee t fringee t benefite t providede t bye t youre t employer?et
Gymetmembershipetnotetonetemployer'setpremises
SeasonetticketsettoettheetNewetYorketMetsetB
elowetmarketetinterestetrateetloan
Alletofettheettheseetareettaxableetfringeetbenefits:etAlletofettheettheseetareettaxableetfringeetbenefits
13. Sharon'sethusbandetpassedetawayetinetYearet10.etWhichetofettheetfollowingetstatementsetisetnotett
rue?
IfetSharon'setdependentetsonetlivesetwithetheretduringetYearet12etandetsheetprovidesettheetsuppor
foretherethousehold,etsheetmayetfileetasetqualifyingetwidow(er)etinetYearet12
1. Jasmineetsoldetaetrentaletpropertyetofet$675,000etinettheetcurrentetyear.etSheethadetinitiallyetpurcha
sede t thee t propertye t fore t $500,000.e t Jasminee t replacede t thee t roofe t twoe t yearse t agoetforet$35,00
0etandetremodeledettheetkitchenetlastetyearetforet$25,000.etBeforeetlistingettheetrentaletpropertyetforet
sale,etJasmineethadettheetinsideetpaintedetforet$500etandettheetfenceetrepairedetforet$800.etAsetofetthe
etdateetofettheetsale,etaccumulated etdepreciationetwas
$63,500.etWhatetisetJasmine'setadjustedetbasisetinettheetrentaletproperty?
$500,000
$497,800
$496,500
$561,300:et $497,800
2. Whichetofettheetfollowingetisetanetordinaryetasset?etE
quipment
DeliveryettrucketAccou
ntsetReceivable
Computer:e t Accountset Receivable
3. Ife t Amos,e t agee t 15,e t receivese t $3,600e t ofe t dividende t incomee t ande t earnse t $4,800e t frome t aetpa
rt-timeetjob,etpartsetofethisetincomeetcanetbeettaxedetatetwhoseetrates?
Amos'set rate
BothetAmos'setrateetandetparents'etratee t Pare
nts'etrate
Trustetincomeettaxetrates:etBothetAmos'setrateetandetparents'etrate
4. InetIRCetSec.et179(b)(3)(A),etwhatetsubpartetiset(3)?etS
ubparagraph
ParagraphetSubsecti
onetSection:etParagraph
5. Whichetofettheetfollowingetisetanetexampleetofetrealty?etA
lletofetthese
ApartmentetStor
efrontetLand:etAllet
ofetthese
, Examet2etTaxetTestetQuestions
6. DaryletandetLindaetdivorcedettwoetyearsetago,etandetLindaetwasetgivenetcustodyetofettheiretson
,etThomas.etDuringettheetcurrentetyear,etDaryletprovidedet$8,000etofetThomas'setsupport,etandetL
indaetprovidedet$5,000.etWhichetofettheetfollowingetstatementsetisettrue?etDaryletmayetclaimetth
eetdependencyetexemptionetbecauseetheetprovidedetmoreetthanet50etpercentetofetThomas'setsupp
ortetifetLindaetcompletesettheetproperetformsettoetwaiveettheetdependencyetexemption.
IfetLindaetcompletesettheetproperetformsettoetwaiveettheetdependencyetexemptionetre-
etgardlesse t ofe t supporte t percentage,e t Daryle t makee t takee t thee t dependencye t exemption.etIf
e t Lindae t doese t note t completee t thee t propere t formse t toe t waivee t thee t dependencye t exemp-
ettion,etthenetsheetisetentitledettoettheetdependencyetexemption.
Alletofetthese:etDaryletandetLindaetdivorcedettwoetyearsetago,etandetLindaetwasetgivenetcustodyetofettheiretson,etThomas.etDuringettheetcurrentetyear,e
tDaryletprovidedet$8,000etofetThomas'setsupport,etandetLindaetprovidedet$5,000.etWhichetofettheetfollowingetstatementsetisettrue?
Daryletmayetclaimettheetdependencyetexemptionetbecauseetheetprovidedetmoreetthanet50etpercentetofetThomas'setsupportetifetLindaetcompleteset
theetproperetformsettoetwaiveettheetdependencyetexemption.
IfetLindaetcompletesettheetproperetformsettoetwaiveettheetdependencyetexemptionetregardlessetofetsupportetpercentage,etDaryletmakeettakeettheetde
pendencyetexemption.
IfetLindaetdoesetnotetcompleteettheetproperetformsettoetwaiveettheetdependencyetexemption,etthenetsheetisetentitledettoettheetdependencyetexemption.
Alletofetthese
7. Whichetofettheetfollowingetisetaetprimaryetauthority?et
Wileyettaxettextbook
IRSetPublicationetTax
etCourtetdecision
JournaletofetTaxationetarticle:etTaxetCourtetdecision
8. WhatetisettheetmaximumetpercentageetofetSocialetSecurityetbenefitsetreceivedetthatetcane t beettax
edetforetFederaletincomeettaxetpurposes?
0%
50%
85%
100%:et85%
, Examet2etTaxetTestetQuestions
9. Whichetofettheetfollowingetisetanetexampleetofetaetcompletelyetnon-taxableetfringeetben-
etefitetforetLori,etanetemployee etofetWORK,etInc.?etWORKetownsetaetdivision etthatetoperatesetanet
airlineetandetaetseparateetdivisionetthatetownsetvacationetresorts.etLorietworksetforettheetairlineetd
ivision.
Reimbursementetofet$225etforetheretsubscriptionettoetAiretTraveletBusinessetJournaletFreeetuse
etofetaetcompany-
ownedetvehicleetforetthreeetweeksetwhileetheretpersonaletcaretwasetbeingetrepairee
FreeetlodgingetatetaetresortetinetFloridaetwhenettheetresortethadetanetoccupancyetrateetofet65%
Groupettermetlifeetinsuranceetofet$200,000:etReimbursementetofet$225etforetheretsubscriptionettoetAiretTraveletBusinessetJo
nal
10. Whichetofettheetfollowingetisetconsideredetincomeetinetrespectetofetaetdecedent?etSala
ryetearnedetbutetnotetpaidetuntiletafteretdecedent'setdeath
Accruedetinterestetearnedetonetbondsetbutetnotetpaidetuntiletafterettheetdecedent'setdeathetDivide
ndetpaidetafteretdecedent'setdeathetforetwhichettheetrecordetdateetwasetbeforeettheetdecedent'setde
ath
Alletofettheseetareetconsideredetincomeetinetrespectetofetaetdecedent:etAlletofettheseetareetconsideredetincomeetinetr
espectetofetaetdecedent
11. Whichetofettheetfollowingetdoettheetdiscriminationetrulesetnotetapplyetto?etWo
rkingetconditionetfringeetbenefit
Thee t discriminatione t rulese t doe t note t applye t toe t anye t ofe t these.etT
ransportationetandetparkingetfringeetbenefit
Lodgingetonettheetemployer'setpremises:etTheetdiscriminationetrulesetdoetnotetapplyettoetanyetofetthese.
12. Whiche t ofe t thee t followinge t ise t ae t taxablee t fringee t benefite t providede t bye t youre t employer?et
Gymetmembershipetnotetonetemployer'setpremises
SeasonetticketsettoettheetNewetYorketMetsetB
elowetmarketetinterestetrateetloan
Alletofettheettheseetareettaxableetfringeetbenefits:etAlletofettheettheseetareettaxableetfringeetbenefits
13. Sharon'sethusbandetpassedetawayetinetYearet10.etWhichetofettheetfollowingetstatementsetisetnotett
rue?
IfetSharon'setdependentetsonetlivesetwithetheretduringetYearet12etandetsheetprovidesettheetsuppor
foretherethousehold,etsheetmayetfileetasetqualifyingetwidow(er)etinetYearet12
